What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2021-03-29 compared with 2020-03-06 · 264 added, 202 removed, 847 unchanged (35% of the section changed)

An investment in shares of our common shares involves a high degree of risk.

You should carefully consider the following information about these risks, together with the other information appearing elsewhere in this Annual Report on Form 10-K, including our consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,”

before deciding to invest in our common shares.

You should carefully consider the following information about these risks, together with the other information appearing elsewhere in this Annual Report on Form 10-K, consolidated financial statements and related notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations, “before deciding to invest in our common shares.

The occurrence of any of the following risks could have a material adverse effect on our business, financial condition, results of operations and future growth prospects or cause our actual results to differ materially from those contained in forward-looking statements we have made in this report and those we may make from time to time.

1 unchanged sentence

We cannot assure you that any of the events discussed below will not occur.

Such risks may be amplified by the COVID-19 pandemic and its potential impact on our business and the global economy.

Risks Related to Our Financial Position and Capital Needs

2 unchanged sentences

Our net loss was $50.0 million and $55.2 million for the years ended December 31, 2020 and 2019, respectively.

As of December 31, 2019, we had an accumulated deficit of $113.5 million.

We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future.

As of December 31, 2020, we had an accumulated deficit of $163.5 million We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future.

Since inception, we have devoted substantially all of our efforts to research and preclinical and clinical development of etripamil, as well as to expanding our management team and infrastructure.

It could be several years, if ever, before we have a commercialized drug.

The COVID-19 pandemic has had an impact on our business, operations and clinical development timelines.

Government orders and restrictions in order to control the spread of the disease have impacted patient recruitment, enrollment and follow-up visits at clinical sites.

At the date of the publication of this annual report, it is not possible to reliably estimate the length and severity of these developments.

We expect that our existing cash, cash equivalents and short-term investments to be sufficient to fund our operations under our current operating plan.

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

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

continue our ongoing and planned development of etripamil, including our Phase 3 clinical trials of etripamil for the treatment of paroxysmal supraventricular tachycardia, or PSVT;

continue our ongoing and planned development of etripamil, including our Phase 3 clinical trials of etripamil for the treatment of paroxysmal supraventricular tachycardia, or PSVT, and our ongoing Phase 2 clinical trial of etripamil for the treatment of atrial fibrillation and rapid ventricular rate, or AFib-RVR;

seek marketing approvals for etripamil for the treatment of PSVT and other cardiovascular indications and any future product candidates that successfully complete clinical trials;

1 unchanged sentence

build a portfolio of product candidates through development, or the acquisition or in-license of drugs, product candidates or technologies;

initiate preclinical studies and clinical trials for etripamil for any additional indications we may pursue, including the clinical trials for the treatment of atrial fibrillation with rapid ventricular rate and angina, and for any additional product candidates that we may pursue in the future;

initiate preclinical studies and clinical trials for etripamil for any additional indications we may pursue, and for any additional product candidates that we may pursue in the future;

maintain, protect and expand our intellectual property portfolio;

1 unchanged sentence

add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts;

incur additional legal, accounting and other expenses associated with operating as a public company.

incur additional legal, insurance related, accounting and other expenses associated with operating as a public company.

To become and remain profitable, we must succeed in developing and eventually commercializing drugs that generate significant revenue.

This will require us to be successful in a range of challenging activities, including completing clinical trials of etripamil and any future product candidates that way may pursue, obtaining regulatory approval, procuring commercial-scale manufacturing, marketing and selling etripamil and any future products for which we may obtain regulatory approval, as well as discovering or acquiring and then developing additional product candidates.

We are only in the preliminary stages of some of these activities.

We are only in the preliminary stages of some of these activities, and we have recently encountered setbacks in our clinical development program for etripamil, as our NODE-301 trial did not meet its primary endpoint.

We may never succeed in these activities and, even if we do, may never generate revenues that are significant enough to achieve profitability.

6 unchanged sentences

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

We are a clinical‑stage company founded in 2003, and our operations to date have been largely focused on raising capital, organizing and staffing our company, and undertaking preclinical studies and conducting clinical trials for etripamil.

We are a clinical-stage company founded in 2003, and our operations to date have been largely focused on raising capital, organizing, staffing our company and undertaking preclinical studies and conducting clinical trials for etripamil.

As an organization, we have not yet demonstrated an ability to successfully complete clinical development, obtain regulatory approvals, manufacture a commercial-scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful commercialization.

8 unchanged sentences

Based on our research and development plans, we expect that our existing cash, cash equivalents and short-term investments, will be sufficient to fund our operations for at least the next 12 months.

However, we will need to obtain substantial additional funding in connection with our continuing operations and planned activities.

However, we will need to obtain

substantial additional funding in connection with our continuing operations and planned activities.

Our future capital requirements will depend on many factors, including:

the timing, progress and results of our ongoing and planned clinical trials of etripamil in PSVT and in other cardiovascular indications;

the timing, progress and results of our ongoing and planned clinical trials of etripamil in PSVT, AFib-RVR and in other cardiovascular indications;

the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials of etripamil for additional indications or any future product candidates that we may pursue;

8 unchanged sentences

Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales.

For example, we recently announced that the pivotal NODE-301 trial of etripamil for PSVT did not meet its primary endpoint.

There can be no guarantee that the RAPID trial or our clinical trial of etripamil for AFib-RVR will meet their primary endpoints.

In addition, etripamil and any future product candidates, if approved, may not achieve commercial success.

8 unchanged sentences

To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a shareholder.

Debt and equity financings, if

available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as redeeming our shares, making investments, incurring additional debt, making capital expenditures, declaring dividends or placing limitations on our ability to acquire, sell or license intellectual property rights.

Debt and equity financings, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such

as redeeming our shares, making investments, incurring additional debt, making capital expenditures, declaring dividends or placing limitations on our ability to acquire, sell or license intellectual property rights.

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

If we are unable to raise additional capital when needed, we may be required to delay, limit, reduce or terminate our drug development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise develop and market ourselves.

Limited directors’ and officers’, or D&O insurance, may reduce the amount of money available to us and may make it difficult for us to retain and attract talented and skilled directors and officers.

Due to recent increases in D&O insurance premiums, we have recently reduced coverage under our D&O insurance policy.

Under our current policy, our directors, officers and other agents are insured against losses for actions taken in their capacities as directors, officers or agents only if we cannot or are prohibited from indemnifying them for such losses.

As a result, we would have to self-fund any indemnification amounts owed to our directors, officers and agents, in which case our financial condition could be materially adversely affected.

We expect that D&O insurance premiums may increase in the future.

If the costs of maintaining adequate D&O insurance coverage increase significantly in the future, our financial condition could be materially adversely affected.

Additionally, limited D&O insurance, or the perception that our D&O insurance is inadequate, may make it difficult for us to retain and attract talented and skilled directors and officers to serve our company, which could adversely affect our business.

Our ability to use our non-capital loss carryforwards to offset future taxable income may be subject to certain limitations.

In general, where control of a corporation has been acquired by a person or group of persons, subsection 111(5) of the Income Tax Act (Canada), or the Canadian Tax Act, and equivalent provincial income tax legislation restrict the corporation’s ability to carry forward non-capital losses from preceding taxation years.

We have not performed a detailed analysis to determine whether an acquisition of control for the purposes of subsection 111(5) of the Canadian Tax Act has occurred after each of our previous issuances of common shares or preferred shares.

8 unchanged sentences

As a result, even if we attain profitability, we may be unable to use a material portion of our non-capital losses and other tax attributes, which could negatively impact our future cash flows.

Our subsidiary’s ability to use our net operating loss carryforwards and certain other tax attributes for U.S.

Our subsidiary’s ability to use its U.S.

net operating loss carryforwards and certain other tax attributes for U.S.

income tax purposes may be limited.

As of December 31, 2019, we had federal net operating loss carryforwards of $ 12.4 million as a result of expenses incurred in Milestone Pharmaceuticals USA, Inc., our wholly‑owned subsidiary.

federal income tax legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act, or the Tax Act, federal NOLs incurred in taxable years ending after December 31, 2017, may be carried forward indefinitely, but the deductibility of federal NOLs generated in tax years beginning after December 31, 2017, is limited.

In addition, under Sections 382 and 383 of the Code and corresponding provisions of state law, if a corporation undergoes an “ownership change,”

which is 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 NOL carryforwards, or NOLs, and other pre‑change tax attributes (such as research tax credits) to offset its post‑change income may be limited.

As of December 31, 2020, we had U.S.

federal net operating loss carryforwards, or NOLs, of $ 17.4 million as a result of expenses incurred by Milestone Pharmaceuticals USA, Inc., our wholly-owned subsidiary.

federal income tax legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act, or the Tax Act, which was modified by legislation enacted on March 27, 2020 entitled the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, U.S.

federal NOLs incurred in taxable years ending beginning after December 31, 2017 may be carried forward

indefinitely.

However, the deductibility of such NOLs in taxable years beginning after December 31, 2020 is limited to 80% of taxable income.

It is uncertain if and to what extent various states will conform to the Tax Act or the CARES Act and there may be periods during which the use of NOLs is suspended or otherwise limited at the state level.

In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is 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 NOL carryforwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited.

It is possible that we have experienced one or more ownership changes in the past.

11 unchanged sentences

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

In addition, approval policies, regulations 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.

For example, in July 2020, we announced that the FDA indicated that two studies, the RAPID study and the completed NODE-301 study, could potentially fulfill the efficacy requirement for our NDA for etripamil in patients with PSVT.

We proposed certain program changes to the FDA and they agreed.

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

2 unchanged sentences

The FDA may also require us to conduct additional nonclinical studies, including human factor studies, or clinical trials for our product candidates either prior to or post-approval, or it may object to elements of our clinical development program.

Our current Phase 3 program involves only one efficacy trial, designed with a threshold p‑value of p<0.01.

This threshold was accepted by the FDA for our single efficacy trial to be used to support an NDA submission.

While we believe that this is sufficient support for our NDA submission plan based on our end‑of‑Phase 2 meeting with the FDA, the standard FDA guidelines require two efficacy trials each with a threshold p‑value of p<0.05 or a single trial with a threshold p‑value of p<0.00125.

Accordingly, there is a risk that additional clinical trials could be required.

In addition, the FDA typically refers applications for novel drugs, like etripamil and potentially any future product candidates, to an advisory committee composed of outside experts.

The FDA is not bound by the recommendation of the advisory committee, but it considers such recommendation when making its decision.

Of the large number of products in development, only a small percentage successfully complete the FDA or comparable foreign regulatory authorities’

approval processes and are commercialized.

Of the large number of products in development, only a small percentage successfully complete the FDA or comparable foreign regulatory authorities’ approval processes and are commercialized.

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

8 unchanged sentences

We intend to build a pipeline of product candidates beyond etripamil for PSVT and progress these product candidates through clinical development.

We may not be able to expand the scope of cardiovascular indications for etripamil beyond PSVT, or leverage our expertise and experience with etripamil in PSVT to other product candidates.

For example, we recently began enrollment in a Phase 2 clinical trial of etripamil for the treatment of AFib-RVR.

We may not be able to successfully expand the scope of cardiovascular indications for etripamil beyond PSVT, or leverage our expertise and experience with etripamil in PSVT to other product candidates.

We may not be able to in-license, acquire or develop future product candidates that are safe and effective.

6 unchanged sentences

competitors may develop alternatives that render any product candidates we develop obsolete;

any product candidates we develop may nevertheless be covered by third parties’

patents or other exclusive rights;

any product candidates we develop may nevertheless be covered by third parties’ patents or other exclusive rights;

a product candidate may be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria;

12 unchanged sentences

Additionally, in our Phase 2 clinical trial, four sprays of study drug were dispensed to patients using four separate FDA approved single spray devices.

In our Phase 3 clinical trials, patients self‑administer two sprays of study drug from an FDA‑approved device that is capable of delivering two separate sprays.

Accordingly, the results of our Phase 2 trial of etripamil may not be replicated in the at‑home setting of our Phase 3 clinical trials.

In addition, until completion of our NODE‑301 Phase 3 clinical trial, patients are in general only eligible to enroll in our open‑label NODE‑302 extension trial after successfully dosing in NODE‑301.

In our Phase 3 clinical trials, patients self-administer two to four sprays of study drug from an FDA approved device that is capable of delivering two separate sprays.

Accordingly, the results of our Phase 2 trial of etripamil may not be replicated in the at-home setting of our Phase 3 clinical trials, and notably, our NODE-301 clinical trial did not meet its primary endpoint.

Etripamil and any future product candidates may fail to show the desired safety and efficacy in clinical development despite positive results in preclinical studies or having successfully advanced through earlier clinical trials.

6 unchanged sentences

Any such delays could negatively impact our business, financial condition, results of operations and prospects.

Our business, operations and clinical development timelines and plans have been adversely affected by the effects of health epidemics, including the COVID-19 pandemic, and could be affected by future health epidemics.

Our business, operations and clinical development timelines and plans have been, and could in the future be adversely affected by health epidemics in regions where we have concentrations of clinical trial sites or other business operations, and could cause significant disruption in the operations of CROs and manufacturers upon whom we rely.

In response to the evolving COVID-19 pandemic, many state, local and foreign governments put in place quarantines, executive orders, shelter-in-place orders and similar government orders and restrictions in order to control the spread of

the disease which resulted in business closures, work stoppages, slowdowns and delays, work-from-home policies, travel restrictions and cancellation of events.

We implemented a work-from-home policy for all employees,[ which are still in effect, ]and we may take further actions that alter our operations as may be required by federal, state or local authorities, or which we determine are in the best interests of our employees.

While the situation is evolving, and certain locations are doing phased re-openings, new restrictions could be implemented, or prior restrictions reinstated in order to address the spread of COVID-19.

These actions, and the uncertainty about the ever evolving landscape, could negatively impact productivity and disrupt our business and operations.

Moreover, our clinical development timelines and plans have been and could continue to be affected by the COVID-19 pandemic.

We rely on contract research organizations or other third parties to assist us with clinical trials, and we cannot guarantee that they will continue to perform their contractual duties in a timely and satisfactory manner as a result of the COVID-19 pandemic.

Clinical trial site initiations and patient enrollment have been and may be further delayed or suspended due to the desire to protect potential study patients and study personnel.

For example, some sites for our NODE-303 and RAPID studies have closed their practices to further enrollment at this time.

Furthermore, the initiation of enrollment in our Phase 2 clinical trial of etripamil for the treatment of AFib-RVR has been delayed due to closures of clinical trial sites.

In addition, already-enrolled patients may not be able to comply with clinical trial protocols or attend follow up visits if quarantines impede patient movement or interrupt healthcare services.

Similarly, our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 could be adversely impacted.

As a result, we may face delays in meeting the anticipated timelines for our ongoing and planned clinical trials.

Further, if the business operations of our third-party manufacturers and suppliers are interrupted, this could disrupt our supply chain and impact our ongoing preclinical studies and clinical trials.

In addition, disruptions or delays in chemistry, manufacturing and control activities for current or future product candidates in general may result in delays and challenges in numerous areas of the drug development lifecycle, including preclinical drug development, clinical stage validation and testing and manufacturing.

In addition, the spread of COVID-19, which has caused a broad impact globally, may materially affect us economically.

While the potential economic impact brought by and the duration of COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity.

In addition, further recessions or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our common shares.

The global COVID-19 pandemic continues to rapidly evolve, and we will continue to monitor the COVID-19 situation closely.

The ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change.

We do not yet know the full extent of the potential impacts on our business, our clinical trials, healthcare systems or the global economy as a whole.

We may encounter substantial delays or difficulties in our clinical trials.

4 unchanged sentences

A failure of one or more clinical trials can occur at any stage of testing.

For example, in March 2020, we reported that the first our NODE-301 trial did not meet its primary endpoint.

With agreement from the FDA, we have revised the second part, and renamed it the RAPID trial, but there can be no guarantee that the recently initiated RAPID trial will meet its primary endpoints.

Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products.

8 unchanged sentences

changes in regulatory requirements and guidance that require amending or submitting new clinical protocols;

interruptions resulting from public health emergencies, including those related to the COVID-19 pandemic;

we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs.

13 unchanged sentences

We do not know whether any of our preclinical studies or clinical trials will begin as planned, need to be restructured or be completed on schedule, if at all.

Further, we, the FDA or an IRB may suspend our clinical trials at any time if it appears that we or our collaborators are failing to conduct a trial in accordance with regulatory requirements, including the FDA’s current Good Clinical Practice, or GCP, regulations, that we are exposing participants to unacceptable health risks, or if the FDA finds deficiencies in our investigational new drug applications, or INDs, or the conduct of these trials.

Therefore, we cannot predict with any certainty the schedule for commencement and completion of future clinical trials.

9 unchanged sentences

Furthermore, failure can occur at any stage, and we could encounter problems that cause us to abandon or repeat clinical trials.

For example, t the pivotal NODE-301 trial of etripamil for PSVT did not meet its primary endpoint.

As a result, we were required to submit a protocol amendment to the FDA for the RAPID trial.

Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be delayed, made more difficult or rendered impossible by multiple factors outside our control.

Identifying and qualifying patients to participate in our clinical trials is critical to our success.

If the actual number of patients with PSVT, or any other indications that we may pursue for etripamil or future product candidates, is smaller than we anticipate, we may encounter difficulties in enrolling patients in our clinical trials, thereby delaying or preventing development and approval of etripamil and any future product candidates.

If the actual number of patients with PSVT, AFib-RVR or any other indications that we may pursue for etripamil or future product candidates, is smaller than we anticipate, we may encounter difficulties in enrolling patients in our clinical trials, thereby delaying or preventing development and approval of etripamil and any future product candidates.

Even once enrolled we may be unable to retain a sufficient number of patients to complete any of our trials.

Patient enrollment and retention in clinical trials depends on many factors, including the size of the patient population, the nature of the trial protocol, the existing body of safety and efficacy data, the number and nature of competing treatments and ongoing clinical trials of competing therapies for the same indication, the proximity of patients to clinical sites, the experience and capabilities of the clinical sites to recruit the correct patients, and the eligibility criteria for the trial.

therapies for the same indication, the proximity of patients to clinical sites, the experience and capabilities of the clinical sites to recruit the correct patients, and the eligibility criteria for the trial.

In our Phase 3 clinical trials, we are attempting to enroll elderly patients and patients taking concomitant medications that impact the heart, such as other calcium channel blockers and beta blockers.

1 unchanged sentence

Such patients may be difficult to enroll in this trial, and the lack of data on these patients may negatively impact the approvability or labeling of etripamil.

Patient enrollment may also continue to be affected by the ongoing COVID-19 pandemic, which could be due to the prioritization of hospitalization resources toward this pandemic, exposure of healthcare providers to COVID-19 and difficulties for patients to access clinical trial sites and comply with clinical trial protocols.

For example, some sites for our NODE-303 study have closed their practices to further enrollment.

In our Phase 2 clinical trial of etripamil for the treatment of PSVT, only 104 of 199 enrolled patients completed the trials, with 70 patients unable to induce or sustain episodes of SVT during the trial period.

The first Phase 3 trial of PSVT for etripamil will enroll up to 500 diagnosed PSVT patients meeting inclusion and exclusion criteria and will be completed when a total of 150 episodes confirmed to be SVT are treated.

PSVT is episodic and unpredictable, and our Phase 3 trial design depends on patients experiencing and recognizing an episode of SVT, self‑administering etripamil and monitoring their cardiac activity using a monitoring device.

We cannot control the timing of these episodes or guarantee that patients will correctly recognize the episode, self‑administer etripamil and use the cardiac monitor as

The first Phase 3 trial of PSVT for etripamil enrolled over 400 diagnosed PSVT patients meeting inclusion and exclusion criteria in order to achieve the required treatment of 150 confirmed PSVT episodes.

PSVT is episodic and unpredictable, and all of our Phase 3 trial designs depend on patients experiencing and recognizing an episode of SVT, self-administering etripamil and monitoring their cardiac activity using a monitoring device.

We cannot control the timing of these episodes or guarantee that patients will correctly recognize the episode, self-administer etripamil and use the cardiac monitor as directed.

We also cannot predict with certainty the number or timing of any SVT episodes for those patients that enroll in the trial.

5 unchanged sentences

In addition, any negative results we may report in clinical trials of etripamil and any future product candidate may make it difficult or impossible to recruit and retain patients in other clinical trials of that same product candidate.

For example, we reported a failed primary endpoint from our NODE-301 trial in March 2020.

Delays or failures in planned patient enrollment or retention may result in increased costs, program delays or both, which could have a harmful effect on our ability to develop etripamil or any future product candidates or could render further development impossible.

In addition, we expect to rely on CROs and clinical trial sites to ensure proper and timely conduct of our future clinical trials and, while we intend to enter into agreements governing their services, we will be limited in our ability to compel their actual performance.

Similarly, our formulation of etripamil is designed to be self‑administered as a nasal spray during an SVT episode by patients enrolled in our Phase 3 trials.

Similarly, our formulation of etripamil is designed to be self-administered as a nasal spray during an SVT episode by patients enrolled in our Phase 3 trials, or during a AFib-RVR episode by patients in our Phase 2 trial.

While we expect enrolled patients to adhere to the protocol, our ability to ensure patient compliance is limited.

9 unchanged sentences

If additional clinical experience indicates that etripamil or any future product candidates have side effects or causes serious or life-threatening side effects, the development of the product candidate may fail or be delayed, or, if the product candidate has received regulatory approval, such approval may be revoked, which would harm our business, prospects, operating results and financial condition.

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 and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publish interim, “top‑line”

or preliminary data from our clinical trials.

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 and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publish interim, “top-line” or preliminary 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.

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.

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

As an organization, we have never completed pivotal clinical trials, and we may be unable to do so for any product candidates we may develop, including our pivotal Phase 3 clinical trials for the treatment of PSVT.

As an organization, we have never successfully completed pivotal clinical trials, and we may be unable to do so for any product candidates we may develop, including our pivotal Phase 3 clinical trials for the treatment of PSVT.

We will need to successfully complete pivotal clinical trials in order to obtain the approval of the FDA and other regulatory agencies to market etripamil or any of our other product candidates.

Carrying out later-stage clinical trials and the submission of a successful NDA is a complicated process.

As an organization, we have not previously completed any later stage or pivotal clinical trials and have limited experience in preparing, submitting and prosecuting regulatory filings.

Consequently, we may be unable to successfully and efficiently execute and complete necessary clinical trials in a way that leads to NDA submission and approval of etripamil for the treatment of PSVT.

As an organization, we have only completed one Phase 3 clinical trial, we have other trials ongoing, and we have limited experience in preparing, submitting and prosecuting regulatory filings.

Due to our limited experience with later stage trials, we may be unable to successfully and efficiently execute and complete necessary clinical trials in a way that leads to NDA submission and approval of etripamil for the treatment of PSVT.

We may require more time and incur greater costs than our competitors and may not succeed in obtaining regulatory approvals of product candidates that we develop.

8 unchanged sentences

we may be required to undertake the expenditure of substantial operational, financial and management resources;

we may be required to issue equity securities that would dilute our shareholders’

percentage ownership of our company;

we may be required to issue equity securities that would dilute our shareholders’ percentage ownership of our company;

we may be required to assume substantial actual or contingent liabilities;

4 unchanged sentences

strategic collaborators may not commit adequate resources to the marketing and distribution of our product candidates, limiting our potential revenues from these products;

disputes may arise between us and our strategic collaborators that result in the delay or termination of the research or development of our product candidates or that result in costly litigation or arbitration that diverts management’s attention and consumes resources;

strategic collaborators may experience financial difficulties;

strategic collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in a manner that could jeopardize or invalidate our proprietary information or expose us to potential litigation;

business combinations or significant changes in a strategic collaborator’s business strategy may adversely affect a strategic collaborator’s willingness or ability to complete its obligations under any arrangement;

strategic collaborators could decide to move forward with a competing product candidate developed either independently or in collaboration with others, including our competitors;

7 unchanged sentences

If any current or future collaborators do not commit sufficient resources to commercialize our product candidates, or we are unable to develop the necessary capabilities on our own, we may be unable to generate sufficient revenue to sustain our business.

We may compete with many companies that currently have extensive, experienced and well‑funded marketing and sales operations to recruit, hire, train and retain marketing and sales personnel.

We may compete with many companies that currently have extensive, experienced, and well-funded marketing and sales operations to recruit, hire, train and retain

marketing and sales personnel.

We will likely also face competition if we seek third parties to assist us with the sales and marketing efforts of etripamil and any future product candidates.

24 unchanged sentences

In addition, even in the event of proper use of etripamil, individual devices may fail.

Increasing the scale of production inherently creates increased risk of manufacturing errors, and we may not be able to adequately inspect every device that is produced, and it is possible that individual devices may fail to perform as designed.

Increasing the scale of production inherently creates increased risk of manufacturing errors, and we may not be able to adequately inspect every

device that is produced, and it is possible that individual devices may fail to perform as designed.

Manufacturing errors could negatively impact market acceptance of any of our product candidates that receive approval, result in negative press coverage, or increase our liability.

17 unchanged sentences

Our competitors may also develop therapies that are safer, more effective, more widely accepted or less expensive than ours, and may also be more successful than we in manufacturing and marketing their drugs.

These advantages could render our product candidates obsolete or non‑competitive before we can recover the costs of such product candidates’

development and commercialization.

These advantages could render our product candidates obsolete or non-competitive before we can recover the costs of such product candidates’ development and commercialization.

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

22 unchanged sentences

However, decisions regarding the extent of coverage and amount of reimbursement to be provided for any product candidates that we develop will be made on a payor-by-payor basis.

Therefore, one payor’s determination to provide coverage for a drug does not assure that other payors will also provide coverage, and adequate reimbursement, for the drug.

Additionally, a third‑party payor’s decision to provide coverage for a therapy does not imply that an adequate reimbursement rate will be approved.

Therefore, one payor’s determination to provide coverage for a drug does not assure that other payors will also provide coverage, and adequate reimbursement, for the drug.

Additionally, a third-party payor’s decision to provide coverage for a therapy does not imply that an adequate reimbursement rate will be approved.

Each payor determines whether or not it will provide coverage for a therapy, what amount it will pay the manufacturer for the therapy, and on what tier of its formulary it will be placed.

The position on a payor’s list of covered drugs, or formulary, generally determines the co‑payment that a patient will need to make to obtain the therapy and can strongly influence the adoption of such therapy by patients and physicians.

The position on a payor’s list of covered drugs, or formulary, generally determines the co-payment that a patient will need to make to obtain the therapy and can strongly influence the

adoption of such therapy by patients and physicians.

Patients who are prescribed treatments for their conditions and providers prescribing such services generally rely on third-party payors to reimburse all or part of the associated healthcare costs.

4 unchanged sentences

If coverage and adequate reimbursement are not available, or are available only to limited levels, we may not be able to successfully commercialize etripamil or any future product candidates that we develop.

In addition, we expect that the increased emphasis on managed care and cost containment measures in the United States by third-party payors and government authorities to continue and will place pressure on pharmaceutical pricing and coverage.

Coverage policies and third-party reimbursement rates may change at any time.

Therefore, even if favorable coverage and reimbursement status is attained for one or more drug products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

If we are unable to obtain and maintain sufficient third-party coverage and adequate reimbursement for our drug products, the commercial success of our drug products may be greatly hindered and our financial condition and results of operations may be materially and adversely affected.

Product liability lawsuits against us could cause us to incur substantial liabilities and could limit commercialization of any product candidates that we may develop.

10 unchanged sentences

and injury to our reputation and significant negative media attention.

Although we maintain product liability insurance coverage with maximum coverage of C$10 million per incident and an aggregate loss limit of C$10 million, such insurance may not be adequate to cover all liabilities that we may incur.

We anticipate that we will need to increase our insurance coverage each time we commence a clinical trial and if we successfully commercialize any product candidate.

Although we maintain clinical trial liability insurance coverage with maximum coverage of $10 million per incident and an aggregate loss limit of $10 million such insurance may not be adequate to cover all liabilities that we may incur with a medical product during the clinical trials.

We anticipate that we will need to increase our insurance coverage each time we commence a clinical trial and maintain a product liability insurance if we successfully commercialize any product candidate.

Insurance coverage is increasingly expensive.

31 unchanged sentences

Moreover, the FDA strictly regulates the promotional claims that may be made about drug products.

In particular, a product may not be promoted for uses that are not approved by the FDA as reflected in the product’s approved labeling.

Physicians, on the other hand, may prescribe products for off-label uses.

Although the FDA and other regulatory agencies do not regulate a physician’s choice of drug treatment made in the physician’s independent medical judgment, they do restrict promotional communications from companies or their sales force with respect to off-label uses of products for which marketing clearance has not been issued.

However, biopharmaceutical companies may share truthful and not misleading information that is otherwise consistent with the labeling.

2 unchanged sentences

The occurrence of any event or penalty described above may inhibit our ability to commercialize etripamil or any future product candidates and harm our business, financial condition, results of operations and prospects.

The FDA’s and other regulatory authorities’

policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates.

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

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

In addition, we cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad.

For example, certain policies of the Trump administration may impact our business and industry.

Namely, the Trump administration has taken several

executive actions, including the issuance of a number of Executive Orders, that could impose significant burdens on, or otherwise materially delay, the FDA’s ability to engage in routine regulatory and oversight activities such as implementing statutes through rulemaking, issuance of guidance, and review and approval of marketing applications.

It is difficult to predict how these executive actions, including the Executive Orders, will be implemented and the extent to which they will affect the FDA’s ability to exercise its regulatory authority.

If these executive actions impose constraints on the FDA’s ability to engage in oversight and implementation activities in the normal course, our business may be negatively impacted.

Namely, the Trump administration took several executive actions, including the issuance of a number of Executive Orders, that could impose significant burdens on, or otherwise materially delay, the FDA’s ability to engage in routine regulatory and oversight activities such as implementing statutes through rulemaking, issuance of guidance, and review and approval of marketing applications.

If these executive actions impose constraints on the FDA’s ability to engage in oversight and implementation activities in the normal course, our business may be negatively impacted.

Our relationships with customers, physicians, and third-party payors are subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, health information privacy and security laws, and other healthcare laws and regulations.

If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.

Healthcare providers, physicians and third‑party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval.

Healthcare providers, including physicians and third-party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval.

Our current and future arrangements with healthcare professionals, principal investigators, consultants, customers and third-party payors subject us to various federal and state fraud and abuse laws, data privacy and security laws, transparency laws and other healthcare laws that may constrain the business or financial arrangements and relationships through which we research, sell, market, and distribute our products, if we obtain marketing approval.

7 unchanged sentences

federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, also imposes, among other things, certain standards and obligations on covered entities including certain healthcare providers, health plans and healthcare clearinghouses, as well as their respective business associates that create, receive, maintain, or transmit individually identifiable health information for or on behalf of a covered entity relating to the privacy, security, transmission and breach reporting of individually identifiable health information.

The federal Physician Payments Sunshine Act, and its implementing regulations, require certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to Centers for Medicare & Medicaid Services information related to certain payments and other transfers of value to physicians, as defined by such law, and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members.

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, also imposes, among other things, certain standards and obligations on covered entities including certain healthcare providers, health plans and healthcare clearinghouses, and their respective business associates that create, receive, maintain, or transmit individually identifiable health information for or on behalf of a covered entity as well as their covered subcontractors relating to the privacy, security, transmission and breach reporting of individually identifiable health information.

The federal Physician Payments Sunshine Act, and its implementing regulations, require certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to Centers for Medicare & Medicaid Services information related to certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members.

Beginning in 2022, applicable manufacturers also will be required to report such information regarding its relationships with physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists and certified nurse midwives during the previous year.

We will also be subject to healthcare regulation and enforcement by the U.S.

1 unchanged sentence

Analogous state and foreign anti-kickback and false claims laws that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers, or that apply regardless of payor;

state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government;

state and local laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;

16 unchanged sentences

For example, in March 2010 the PPACA, was passed, which substantially changed the way healthcare is financed by both governmental and private payors in the United States.

There remain judicial and Congressional challenges to certain aspects of the PPACA as well as efforts by the Trump administration to repeal or replace certain aspects of the PPACA.

For example, the Tax Cuts and Jobs Act of 2017, or the Tax Act, was enacted, which includes a provision that repealed, effective January 1, 2019, the tax‑based shared responsibility payment imposed by the PPACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.”

In addition, the 2020 federal spending package permanently eliminates, effective January 1, 2020, the PPACA‑mandated “Cadillac”

tax on high‑cost employer‑sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminates the health insurer tax.

There have been executive, judicial and Congressional challenges to certain aspects of the PPACA..

For example, the Tax Cuts and Jobs Act of 2017, or the Tax Act, was enacted, which included a provision that repealed, effective January 1, 2019, the tax-based shared responsibility payment imposed by the PPACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.” In addition, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the PPACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminated the health insurer tax.

Additionally, on December 14, 2018, a Texas U.S.

District Court Judge ruled that the PPACA is unconstitutional in its entirety because the “individual

mandate”

was repealed by Congress as part of the Tax Act.

District Court Judge ruled that the PPACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of the Tax Act.

Additionally, on December 18, 2019, the U.S.

Court of Appeals for the 5th Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the PPACA are invalid as well.

On March 2, 2020, the United States Supreme Court granted the petitions for writs of certiorari to review this case and has allotted one hour for oral arguments.

It is unclear when such oral arguments are to be held and when a decision is expected to be made.

It is also unclear how such litigation and other efforts to repeal and replace the PPACA will impact the PPACA and our business.

The United States Supreme Court is currently reviewing this case.

It is unclear how such litigation and other efforts to repeal and replace the PPACA will impact the PPACA and our

Although the U.S.

Supreme Court has not yet ruled on the constitutionality of the PPACA, on January 28, 2021, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through May 15, 2021 for purposes of obtaining health insurance coverage through the PPACA marketplace.

The executive order also instructs certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the PPACA.

It is unclear how the Supreme Court ruling, other such litigation, and the healthcare reform measures of the Biden administration will impact the PPACA and our business.

Further, in the United States there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under government payor programs, and review the relationship between pricing and manufacturer patient programs.

At the federal level, the Trump administration’s budget proposal for fiscal year 2020 contains further drug price control measures that could be enacted during the budget process or in other future legislation.

In addition, the Trump administration released a “Blueprint”

to lower drug prices and reduce out of pocket costs of drugs that contains additional proposals to increase manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products, and reduce the out of pocket costs of drug products paid by consumers.

The Department of Health and Human Services has solicited feedback on some of these measures and has implemented others under its existing authority.

While some of these measures may require additional authorization to become effective, U.S.

Congress and the Trump administration have indicated that they will continue to seek new legislative and/or administrative measures to control drug costs.

At the federal level, the Trump administration used several means to propose or implement drug pricing reform, including through federal budget proposals, executive orders and policy initiatives.

For example, on July 24, 2020 and September 13, 2020, the Trump administration announced several executive orders related to prescription drug pricing that attempted to implement several of the administration’s proposals.The FDA also released a final rule on September 24, 2020, effective November 30, 2020, implementing a portion of the importation executive order providing guidance for states to build and submit importation plans for drugs from Canada.

Further, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.

The implementation of the rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation.

The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed pending review by the Biden administration until March 22, 2021.

On November 20, 2020, CMS issued an interim final rule implementing the Trump Administration’s Most Favored Nation executive order, which would tie Medicare Part B payments for certain physician-administered drugs to the lowest price paid in other economically advanced countries, effective January 1, 2021.

On December 28, 2020, the United States District Court in Northern California issued a nationwide preliminary injunction against implementation of the interim final rule.

It is unclear whether the Biden administration will work to reverse these measures or pursue similar policy initiatives.

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

2 unchanged sentences

federal government will pay for healthcare products and services, which could result in reduced demand for etripamil or any future product candidates or additional pricing pressures.

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

It is also possible that additional governmental action will be taken in response to the COVID-19 pandemic.

In addition, other legislative changes have been proposed and adopted since the PPACA was enacted.

On August 2, 2011, the Budget Control Act of 2011 was signed into law, which includes reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030 with the exception of a temporary suspension from May 1, 2020 through March 31, 2021 due to the COVID-19 pandemic, unless additional Congressional action is taken.

On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

We cannot predict the likelihood, nature or extent of health reform initiatives that may arise from future legislation or administrative action in the United States, particularly in light of the new presidential administration, or any other jurisdiction.

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

Our business involves the use of hazardous materials and we and our third-party manufacturers and suppliers must comply with environmental laws and regulations, which can be expensive and restrict how we do business.

Our research and development activities and our third‑party manufacturers’

and suppliers’

activities involve the controlled storage, use and disposal of hazardous materials owned by us, including the components of etripamil and any future product candidates and other hazardous compounds.

Our research and development activities and our third-party manufacturers’ and suppliers’ activities involve the controlled storage, use and disposal of hazardous materials owned by us, including the components of etripamil and any future product candidates and other hazardous compounds.

We and our manufacturers and suppliers are subject to laws and regulations governing the use, manufacture, storage, handling and disposal of these hazardous materials.

In some cases, these hazardous materials and various wastes resulting from their use are stored at our and our manufacturers’

facilities pending their use and disposal.

In some cases, these hazardous materials and various wastes resulting from their use are stored at our and our manufacturers’ facilities pending their use and disposal.

We cannot eliminate the risk of contamination, which could cause an interruption of our commercialization efforts, research and development efforts and business operations, environmental damage resulting in costly clean-up and liabilities under applicable laws and regulations governing the use, storage, handling and disposal of these materials and specified waste products.

33 unchanged sentences

we may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers in the manufacturing process for our product candidates;

operations of our third‑party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier;

and carrier disruptions or increased costs that are beyond our control.

operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including public health emergencies, such as the COVID-19 pandemic, natural disasters, such as earthquakes, fires or floods, the bankruptcy of the manufacturer or supplier, and carrier disruptions or increased costs that are beyond our control.

In addition, if we enter into a strategic collaboration with a third party for the commercialization of etripamil or any future product candidate, we will not be able to control the amount of time or resources that they devote to such efforts.

3 unchanged sentences

We rely on third parties to conduct, supervise and monitor our preclinical studies and clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm our business.

We have engaged CROs to conduct our Phase 3 clinical trials of etripamil for the treatment of PSVT, and we expect to engage a CRO for future clinical trials of etripamil and any future product candidates.

We have engaged CROs to conduct our Phase 3 clinical trials of etripamil for the treatment of PSVT, and our Phase 2 clinical trial of etripamil for the treatment of AFib-RVR, and we expect to engage a CRO for future clinical trials of etripamil and any future product candidates.

We do not currently have the ability to independently conduct any clinical trials.

1 unchanged sentence

We rely upon CROs to monitor and manage data for our clinical programs, as well as the execution of future nonclinical studies.

We expect to control only certain aspects of our CROs’

We expect to control only

certain aspects of our CROs’ activities.

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

5 unchanged sentences

Our reliance on third parties to conduct clinical trials will result in less direct control over the management of data developed through clinical trials than would be the case if we were relying entirely upon our own staff.

laws and foreign law equivalents and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information.

Any failure by third parties to prevent unauthorized access, use or disclosure of data, including personal information regarding our patients or employees, could harm our reputation, cause us not to comply with federal and/or state breach notification laws and foreign law equivalents and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information.

Communicating with CROs and other third parties can be challenging, potentially leading to mistakes as well as difficulties in coordinating activities.

3 unchanged sentences

experience regulatory compliance issues;

experience business disruptions from public health emergencies, such as the COVID-19 pandemic, and accompanying shelter in place orders;

undergo changes in priorities or become financially distressed.

18 unchanged sentences

There are a limited number of device suppliers that address our particular design requirements.

While we intend to explore alternative nasal spray devices for the delivery of etripamil that are produced by other suppliers to have backup sources for future commercial needs, we may not identify other nasal device suppliers that meet our requirements, and such alternative devices may not be as effective at the delivery of etripamil as our current supplier’s device.

We do not currently have a formal supply agreement with our current sole nasal spray device supplier, and obtain such devices as needed.

Even if we reach

agreement for commercial supply, if we do not have additional nasal spray device suppliers, our sole supplier may be unable to meet our demands.

Even if we reach agreement for commercial supply, if we do not have additional nasal spray device suppliers, our sole supplier may be unable to meet our demands.

Unpredictability of supply could have a material adverse effect on our commercialization plans for etripamil, if approved, and could have a material adverse effect on our business and financial condition.

11 unchanged sentences

We may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.

We may also fail to identify patentable aspects of our research and development before it is too late to obtain patent protection.

We may also fail to identify patentable aspects

of our research and development before it is too late to obtain patent protection.

Therefore, these and any of our patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.

12 unchanged sentences

We may not be aware of all third-party intellectual property rights potentially relating to etripamil or any future product candidates.

Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in

some cases not at all.

For example, U.S.

5 unchanged sentences

Moreover, we may be subject to a third-party pre-issuance submission of prior art to the U.S.

Patent and Trademark Office, or USPTO, or become involved in opposition, derivation, reexamination, inter partes review, post grant review, or interference proceedings, in the United States or elsewhere, challenging our patent rights or the patent rights of others.

Patent and Trademark Office, or USPTO, or become involved in opposition, derivation, reexamination, inter parties review, post grant review, or interference proceedings, in the United States or elsewhere, challenging our patent rights or the patent rights of others.

An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or product candidates and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights.

46 unchanged sentences

In addition, in a patent infringement proceeding, there is a risk that a court will decide that a patent of ours is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other party from using the invention at issue.

There is also a risk that, even if the validity of such patents is upheld, the court will construe the patent’s claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our patents do not cover the invention.

An adverse outcome in a litigation or proceeding involving our patents could limit our ability to assert our patents against those parties or other competitors, and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive products.

20 unchanged sentences

patent claim, there is no assurance that a court of competent jurisdiction would invalidate the claims of any such U.S.

If we are found to infringe a third party’s valid and enforceable intellectual property rights, we could be required to obtain a license from such third party to continue developing, manufacturing and marketing our product candidate(s) and technology.

However, we may not be

able to obtain any required license on commercially reasonable terms or at all.

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

Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, and it could require us to make substantial licensing and royalty payments.

We could be forced, including by court order, to cease developing, manufacturing and commercializing the infringing technology or product candidate.

In addition, we could be found liable for monetary damages, including treble damages and attorneys’

fees, if we are found to have willfully infringed a patent or other intellectual property right.

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

A finding of infringement could prevent us from manufacturing and commercializing etripamil or any future product candidates or force us to cease some or all of our business operations, which could materially harm our business.

Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business, financial condition, results of operations and prospects.

See the section herein titled “Legal Proceedings”

for additional information.

See the section herein titled “Legal Proceedings” for additional information.

We may need to license intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms.

1 unchanged sentence

It may be necessary for us to use the patented or proprietary technology of third parties to commercialize our product candidates, in which case we would be required to obtain a license from these third parties.

Such a license may not be available on commercially reasonable terms, or at all, and we could be forced to accept unfavorable contractual terms.

Such a license may not be available on commercially reasonable terms, or at all, and we

could be forced to accept unfavorable contractual terms.

If we are unable to obtain such licenses on commercially reasonable terms, our business could be harmed.

1 unchanged sentence

Many of our employees, consultants or advisors are currently, or were previously, employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors.

Although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know‑how of others in their work for us, we may be subject to claims that these individuals or we have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s current or former employer.

Although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that these individuals or we have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s current or former employer.

Litigation may be necessary to defend against these claims.

11 unchanged sentences

Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce patents that we have licensed or that we might obtain in the future.

Similarly, changes in patent

law and regulations in other countries or jurisdictions, changes in the governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents or to enforce patents that we have licensed or that we may obtain in the future.

Similarly, changes in patent law and regulations in other countries or jurisdictions, changes in the governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents or to enforce patents that we have licensed or that we may obtain in the future.

We may not be able to protect our intellectual property rights throughout the world, which could negatively impact our business.

13 unchanged sentences

Despite the contractual provisions employed when working with third parties, the need to share confidential information increases the risk that such information become known by our competitors, is inadvertently incorporated into the technology of others, or is disclosed or used in violation of these agreements.

Given that our proprietary position is based, in part, on our know‑how, a competitor’s discovery of our know‑how or other unauthorized use or disclosure could have an adverse effect on our business and results of operations.

Given that our proprietary position is based, in part, on our know-how, a competitor’s discovery of our know-how or other unauthorized use or disclosure could have an adverse effect on our business and results of operations.

In addition, these agreements typically restrict the ability of our advisors, employees, third-party contractors and consultants to publish data potentially relating to our know-how.

4 unchanged sentences

Moreover, if confidential information that is licensed or disclosed to us by our partners, collaborators, or others is inadvertently disclosed or subject to a breach or violation, we may be exposed to liability to the owner of that confidential information.

Enforcing a claim that a third‑party illegally obtained and is using our

proprietary information, like patent litigation, is expensive and time consuming, and the outcome is unpredictable.

Enforcing a claim that a third-party illegally obtained and is using our proprietary information, like patent litigation, is expensive and time consuming, and the outcome is unpredictable.

In addition, courts outside the United States are sometimes less willing to protect proprietary information.

31 unchanged sentences

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

We do not currently maintain “key person”

life insurance on the lives of our executives or any of our employees other than on our President and Chief Executive Officer, Joseph Oliveto.

We do not currently maintain “key person” life insurance on the lives of our executives or any of our employees other than on our President and Chief Executive Officer, Joseph Oliveto.

Recruiting and retaining qualified scientific and clinical personnel and, if we progress the development of any of our product candidates, commercialization, manufacturing and sales and marketing personnel, will be critical to our success.

8 unchanged sentences

As of December 31, 2020, we had 28 full-time employees.

As the clinical development of etripamil progresses and as we expand our pipeline, we expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of research, drug development, regulatory affairs and, if etripamil or any future product candidates receives marketing approval, sales, marketing and distribution.

To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel.

Due to our limited financial resources and the limited experience of our management team in managing a company with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel.

The expansion of our operations may lead to significant costs and may divert our management and business development resources.

As the clinical development of etripamil progresses and as we expand our pipeline, we may experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of research, drug development, regulatory affairs and, if etripamil or any future product candidates receives marketing approval, sales, marketing and distribution.

To manage any future growth, we will be required to continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel.

Due to our limited financial resources and the limited experience of our management team in managing a company with growth, we may not be able to effectively manage any expansion of our operations or recruit and train additional qualified personnel.

Any expansion of our operations may lead to significant costs and may divert our management and business development resources.

Any inability to manage growth could delay the execution of our business plans or disrupt our operations.

8 unchanged sentences

Security breaches and other inappropriate access can be difficult to detect, and any delay in identifying them may lead to increased harm of the type described above.

While we have implemented security measures to protect our information technology systems and infrastructure, such measures may not prevent service interruptions or security breaches that could adversely affect our business and to the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed and the further development and commercialization of our product candidates could be delayed.

If we fail to comply with European data protection laws, including the new European Union General Data Protection Regulation 2016/679, or GDPR, when appropriate, and any other existing or future data protection regulations, our business, financial condition, results of operations and prospects may be materially adversely affected.

inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed and the further development and commercialization of our product candidates could be delayed.

If we fail to comply with European data protection laws, including the European Union General Data Protection Regulation 2016/679, or GDPR, when appropriate, and any other existing or future data protection regulations, our business, financial condition, results of operations and prospects may be materially adversely affected.

We anticipate seeking regulatory approval for, and commercialize, etripamil for the treatment of PSVT in Europe.

We may also elect to do so for future product candidates.

We are conducting clinical trial activities in Europe, which will subject us to European data protection laws, including GDPR.

The GDPR, which came into effect on May 25, 2018, establishes new requirements applicable to the processing of personal data (i.e., data which identifies an individual or from which an individual is identifiable), affords new data protection rights to individuals (e.g., the right to erasure of personal data) and imposes penalties for serious breaches of up to 4% annual worldwide turnover or €20 million, whichever is greater.

Individuals (e.g., study subjects) also have a right to compensation for financial or non‑financial losses (e.g., distress).

We are conducting clinical trial activities in Europe, which will subject us to European data protection laws, including the GDPR.

The GDPR establishes requirements applicable to the processing of personal data (i.e., data which identifies an individual or from which an individual is identifiable).

The GDPR creates significant and complex compliance burdens for companies such as:

limiting permitted processing of personal data to only that which is necessary for specified, explicit and legitimate purposes;

requiring the establishment a legal basis for processing personal data;

expressly confirming that ‘pseudonymized’ or key-coded data constitutes personal data to which the GDPR applies;

creating obligations for controllers and processors to appoint data protection officers in certain circumstances;

increasing transparency obligations to data subjects for controllers (including presentation of certain information in a concise, intelligible and easily accessible form about how their personal data is used and their rights vis-à-vis that data and its use);

introducing the obligation to carry out so-called data protection impact assessments in certain circumstances;

establishing limitations on collection and retention of personal data through ‘data minimization’ and ‘storage limitation’ principles;

establishing obligations to implement ‘privacy by design’;

introducing obligations to honor increased rights for data subjects (such as rights for individuals to be ‘forgotten,’ rights to data portability, rights to object etc.

in certain circumstances);

formalizing a heightened and codified standard of data subject consent;

establishing obligations to implement certain technical and organizational safeguards to protect the security and confidentiality of personal data;

introducing obligations to agree to certain specific contractual terms and to take certain measures when engaging third- party processors and joint controllers;

introducing the obligation to provide notice of certain significant personal data breaches to the relevant supervisory authority(ies) and affected individuals;

and mandating the appointment of representatives in the United Kingdom and/or European Union in certain circumstances.

The processing of “special category personal data”, such as health information, may also impose heightened compliance burdens under the GDPR.

The GDPR has robust regulatory enforcement and penalties for noncompliance, including fines of up to €20 million or 4% of global annual revenue of any noncompliant company for the preceding financial year, whichever is higher.

In addition to administrative fines, a wide variety of other potential enforcement powers are available to competent supervisory authorities in respect of potential and suspected violations of the GDPR, including extensive audit and inspection rights, and powers to order temporary or permanent bans on all or some processing of personal data carried out by noncompliant actors.

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 resulting from violations of the GDPR.

There may be circumstances under which a failure to comply with GDPR, or the exercise of individual rights under the GDPR, would limit our ability to utilize clinical trial data collected on certain subjects.

1 unchanged sentence

This may be onerous and materially adversely affect our business, financial condition, results of operations and prospects.

A particular issue presented by the GDPR is the restriction on transfers of personal data from Europe to the United States and most other countries unless the parties to the transfer have implemented specific safeguards to protect the transferred personal data.

One of the primary safeguards allowing U.S.

companies to import personal data from Europe is the European Commission’s Standard Contractual Clauses and we have relied on Standard Contractual Clauses to comply with the GDPR’s restrictions on transfer of personal data out of Europe.

However, in July 2020 the Court of Justice of the European Union, or CJEU, in a case known colloquially as “Schrems II” raised questions about whether the Standard Contractual Clauses can lawfully be used for personal data transfers from Europe to the United States or other third countries that are not the subject of an adequacy decision of the European Commission.

While the CJEU upheld the adequacy of the Standard Contractual Clauses in principle in Schrems II, it made clear that reliance on those Clauses alone may not necessarily be sufficient in all circumstances.

Use of the Standard Contractual Clauses must now be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular regarding applicable surveillance laws and relevant rights of individuals with respect to the transferred data.

In the context of any given transfer, where the legal regime applicable in the destination country may or does conflict with the

intended operation of the Standard Contractual Clauses and/or applicable European law, the decision in Schrems II and subsequent draft guidance from the European Data Protection Board, or EDPB, would require the parties to that transfer to implement certain supplementary technical, organizational and/or contractual measures to rely on the Standard Contractual Clauses as a compliant ‘transfer mechanism.’ However, the aforementioned draft guidance from the EDPB on such supplementary technical, organizational and/or contractual measures appears to conclude that no combination of such measures could be sufficient to allow effective reliance on the Standard Contractual Clauses in the context of transfers of personal data ‘in the clear’ to recipients in countries where the power granted to public authorities to access the transferred data goes beyond that which is ‘necessary and proportionate in a democratic society’ – which may, following the CJEU’s conclusions in Schrems II on relevant powers of United States public authorities and commentary in that draft EDPB guidance, include the United States in certain circumstances (e.g., where Section 702 of the US Foreign Intelligence Surveillance Act applies).

At present, there are few, if any, viable alternatives to the Standard Contractual Clauses.

As such, if we are unable to implement a valid solution for personal data transfers from Europe, including, we will face increased exposure to regulatory actions, substantial fines and injunctions against processing personal data from Europe.

Inability to import personal data from Europe may also:

restrict our activities in Europe;

limit our ability to collaborate with partners as well as other service providers, contractors and other companies subject to European data protection laws;

and require us to increase our data processing capabilities in Europe at significant expense.

Restrictions on our ability to import personal data from Europe could therefore impact our clinical trial activities in Europe and limit our ability to collaborate with CROs and other third parties subject to European data protection laws.

Additionally, other countries outside of Europe have enacted or are considering enacting similar cross-border data transfer restrictions and laws requiring local data residency, which could increase the cost and complexity of delivering our services and operating our business.

The type of challenges we face in Europe will likely also arise in other jurisdictions that adopt laws similar in construction to the GDPR or regulatory frameworks of equivalent complexity.

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

5 unchanged sentences

It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from government investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.

If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participating in government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non‑compliance with these laws, contractual

damages, reputational harm and the curtailment or restructuring of our operations, any of which could have a negative impact on our business, financial condition, results of operations and prospects.

If we engage in future acquisitions or strategic collaborations, this may increase our capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities and subject us to other risks.

We actively search for and continually evaluate various acquisition and strategic collaboration opportunities, including licensing or acquiring complementary drugs, intellectual property rights, technologies or businesses, as deemed appropriate to carry out our business plan.

appropriate to carry out our business plan.

Any potential acquisition or strategic partnership may entail numerous risks, including:

2 unchanged sentences

assimilation of operations, intellectual property and drugs of an acquired company, including difficulties associated with integrating new personnel;

the diversion of our management’s attention from our existing drug programs and initiatives in pursuing such a strategic partnership, merger or acquisition;

retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;

9 unchanged sentences

As a result of this volatility, you may not be able to sell your common shares at or above the price paid for the shares.

In addition to the factors discussed in this “Risk Factors”

section and elsewhere in this Annual Report on Form 10-K, the market price for our common shares may be influenced by the following:

In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Annual Report on Form 10-K, the market price for our common shares may be influenced by the following:

the commencement, enrollment or results of our planned or future clinical trials of etripamil and any future product candidates or those of our competitors;

14 unchanged sentences

general economic, political, and market conditions and overall fluctuations in the financial markets in the United States and abroad;

investors’

general perception of us and our business.

investors’ general perception of us and our business.

These and other market and industry factors may cause the market price and demand for our common shares to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from selling their shares at or above the price paid for the shares and may otherwise negatively affect the liquidity of our common shares.

4 unchanged sentences

Any such negative outcome could result in payments of substantial damages or fines, damage to our reputation or adverse changes to our business practices.

Defending against litigation is costly and time‑consuming, and could divert our management’s attention and our resources.

Defending against litigation is costly and time-consuming, and could divert our management’s attention and our resources.

Furthermore, during the course of litigation, there could be negative public announcements of the results of hearings, motions or other interim proceedings or developments, which could have a negative effect on the market price of our common shares.

2 unchanged sentences

As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction.

The price for our shares could, for example, decline significantly in the event that a large number of our common shares are sold on the market without commensurate demand, as compared to a seasoned issuer that could better absorb those sales without adverse impact on its share price.

The price for our shares could, for example, decline significantly in the event that a large number of our common shares are sold on the market without

commensurate demand, as compared to a seasoned issuer that could better absorb those sales without adverse impact on its share price.

Concentration of ownership of our common shares among our existing executive officers, directors and principal shareholders may prevent new investors from influencing significant corporate decisions.

22 unchanged sentences

Holders (as defined below).

Based on our analysis of our income, assets, activities and market capitalization for our taxable year ending December 31, 2018, we believe that we may have been classified as a passive foreign investment company, or PFIC, for our taxable year ending December 31, 2018.

Based on the expected nature and composition of our income and assets for our taxable year ending December 31, 2019, we expect that we may have been classified as a PFIC for our taxable year ending December 31, 2019.

We have not yet made any determination as to our expected PFIC status for our taxable year ending December 31, 2020.

Based on the nature and composition of our income, assets, activities and market capitalization for our taxable year ending December 31, 2020, we believe that we may have been classified as a passive foreign investment company, or PFIC, for our taxable year ending December 31, 2020.

Based on the expected nature and composition of our income and assets for our taxable year ending December 31, 2021, we expect that we may be classified as a PFIC for our taxable

year ending December 31, 2021.

If we are a PFIC for the current taxable year, or any subsequent taxable years, we intend to annually furnish U.S.

Holders, upon request, a “PFIC Annual Information Statement,”

with the information required to allow U.S.

Holders to make a “qualified electing fund”

election, or “QEF Election”

for United States federal income tax purposes.

Holders, upon request, a “PFIC Annual Information Statement,” with the information required to allow U.S.

Holders to make a “qualified electing fund” election, or “QEF Election” for United States federal income tax purposes.

No assurances regarding our PFIC status can be provided for any past, current or future taxable years.

1 unchanged sentence

In particular, the characterization of our assets as active or passive may depend in part on our current and intended future business plans, which are subject to change.

In addition, for our current and future taxable years, the total value of our assets for PFIC testing purposes may be determined in part by reference to the market price of our common shares from time to time, which may fluctuate considerably.

As a result, our PFIC status may change from year to year and we have not yet made any determination as to our expected PFIC status for the current year.

In addition, the total value of our assets for PFIC testing purposes may be determined in part by reference to the market price of our common shares from time to time, which may fluctuate considerably.

As a result, our PFIC status may change from year to year.

Under the income test, our status as a PFIC depends on the composition of our income which will depend on the transactions we enter into in the future and our corporate structure.

1 unchanged sentence

If we are a PFIC, U.S.

Holders of our common shares will be subject to adverse U.S.

Holders may be subject to adverse U.S.

federal income tax consequences, such as ineligibility for any preferential tax rates for individuals on capital gains or on actual or deemed dividends, interest charges on certain taxes treated as deferred, and additional reporting requirements under U.S.

federal income tax laws and regulations.

A “U.S.

Holder”

is a holder who, for U.S.

Holder” is a holder of our common shares who, for U.S.

federal income tax purposes, is:

(i) an individual who is a citizen or

resident of the United States;

(ii) a corporation, or another entity taxable as a corporation, created or organized in or

under the laws of the United States, any state therein or the District of Columbia;

(iii) an estate the income of which is

subject to U.S.

(i) an individual who is a citizen or resident of the United States;

(ii) a corporation, or another entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia;

(iii) an estate the income of which is subject to U.S.

federal income taxation regardless of its source;

or (iv) a trust if (1) a U.S.

court is able to exercise

primary supervision over the administration of the trust and one or more U.S.

persons have authority to control all

substantial decisions of the trust or (2) the trust has a valid election to be treated as a U.S.

person under applicable U.S.

Treasury Regulations.

court is able to exercise primary supervision over the administration of the trust and one or more U.S.

persons have authority to control all substantial decisions of the trust or (2) the trust has a valid election to be treated as a U.S.

person under applicable U.S.Treasury Regulations.

Holder is treated as owning at least 10% of our common shares, such holder may be subject to adverse U.S.

1 unchanged sentence

Holder is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our common shares, such U.S.

Holder may be treated as a “United States shareholder”

with respect to each “controlled foreign corporation”

in our group (if any).

Holder may be treated as a “United States shareholder” with respect to each “controlled foreign corporation” in our group (if any).

Because our group includes at least one U.S.

2 unchanged sentences

A United States shareholder of a controlled foreign corporation may be required to annually report and include in its U.S.

taxable income its pro rata share of “Subpart F income,”

“global intangible low‑taxed income”

and investments in U.S.

taxable income its pro rata share of “Subpart F income,” “global intangible low-taxed income” and investments in U.S.

property by that controlled foreign corporation, regardless of whether that controlled foreign corporation, or we, make any distributions.

5 unchanged sentences

Holder to significant monetary penalties and may extend the statute of limitations with respect to its U.S.

federal income tax return for the

year for which reporting was due.

federal income tax return for the year for which reporting was due.

Holders should consult their tax advisors regarding the potential application of these rules to their investment in our common shares.

Future changes to tax laws could materially adversely affect our company and reduce net returns to our shareholders.

Our tax treatment is subject to the enactment of, or changes in, tax laws, regulations and treaties, or the interpretation thereof, tax policy initiatives and reforms under consideration and the practices of tax authorities in jurisdictions in which we operate, including those related to the Organization for Economic Co‑Operation and Development’s, or OECD, Base Erosion and Profit Shifting, or BEPS, Project, the European Commission’s state aid investigations and other initiatives.

Our tax treatment is subject to the enactment of, or changes in, tax laws, regulations and treaties, or the interpretation thereof, tax policy initiatives and reforms under consideration and the practices of tax authorities in jurisdictions in which we operate, including those related to the Organization for Economic Co-Operation and Development’s, or OECD, Base Erosion and Profit Shifting, or BEPS, Project, the European Commission’s state aid investigations and

other initiatives.

Such changes may include (but are not limited to) the taxation of operating income, investment income, dividends received or (in the specific context of withholding tax) dividends paid.

2 unchanged sentences

Future guidance from the Internal Revenue Service and other tax authorities with respect to the Tax Act may affect us, and certain aspects of the Tax Act could be repealed or modified in future legislation.

In addition, it is uncertain if and to what extent various states will conform to the Tax Act or any newly enacted federal tax legislation.

For example, the CARES Act modified certain provisions of the Tax Act.

In addition, it is uncertain if and to what extent various states will conform to the Tax Act, the CARES Act or any newly enacted federal tax legislation.

Changes in corporate tax rates, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses under the Tax Act or future reform legislation could have a material impact on the value of our deferred tax assets, could result in significant one-time charges, and could increase our future U.S.

4 unchanged sentences

Internal Revenue Service or another tax authority could challenge our allocation of income by tax jurisdiction and the amounts paid between our affiliated companies pursuant to our intercompany arrangements and transfer pricing policies, including amounts paid with respect to our intellectual property development.

under international tax treaties, and such an assertion, if successful, could increase our expected tax liability in one or more jurisdictions.

Similarly, a tax authority could assert that we are subject to tax in a jurisdiction where we believe we have not established a taxable connection, often referred to as a “permanent establishment” under international tax treaties, and such an assertion, if successful, could increase our expected tax liability in one or more jurisdictions.

A tax authority may take the position that material income tax liabilities, interest and penalties are payable by us, in which case, we expect that we might contest such assessment.

Contesting such an assessment may be lengthy and costly and if we were unsuccessful in disputing the assessment, the result could increase our anticipated effective tax rate.

We are an “emerging growth company,”

and the reduced disclosure requirements applicable to emerging growth companies may make our common shares less attractive to investors.

We are an “emerging growth company,”

or EGC, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we intend to take advantage of some of the exemptions from reporting requirements that are applicable to other public companies that are not emerging growth companies, including:

We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our common shares less attractive to investors.

We are an “emerging growth company,” or EGC, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we intend to take advantage of some of the exemptions from reporting requirements that are applicable to other public companies that are not emerging growth companies, including:

not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;

not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

reduced disclosure obligations regarding executive compensation;

1 unchanged sentence

We currently take advantage of some or all of these reporting exemptions and may continue to until we are no longer an EGC.

We will remain an EGC until the earlier of (i) December 31, 2024, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.07 billion, (iii) the last day of the first fiscal year in which we are deemed to be a large accelerated filer, which means the market value of our common shares that is held by non‑affiliates exceeds $700 million as of the prior June 30th, and (iv) the date on which we have issued more than $1.0 billion in non‑convertible debt during the prior three‑year period.

to be a large accelerated filer, which means the market value of our common shares that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (iv) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

We cannot predict whether investors will find our common shares less attractive because we will rely on these exemptions.

30 unchanged sentences

Certain matters of procedure will also be governed by Canadian law.

Furthermore, it may not be possible to subject foreign persons or entities to the jurisdiction of the courts in Canada.

Furthermore, it may not be possible to

subject foreign persons or entities to the jurisdiction of the courts in Canada.

Similarly, to the extent that our assets are located in Canada, investors may have difficulty collecting from us any judgments obtained in the U.S.

1 unchanged sentence

securities provisions.

We are governed by the corporate laws of Quebec, which in some cases have a different effect on shareholders than the corporate laws of Delaware.

We are governed by the Business Corporations Act (Quebec), or the BCA, and other relevant laws, which may affect the rights of shareholders differently than those of a company governed by the laws of a U.S.

We are governed by the corporate laws of Québec, which in some cases have a different effect on shareholders than the corporate laws of Delaware.

We are governed by the Business Corporations Act (Québec), or the QBCA, and other relevant laws, which may affect the rights of shareholders differently than those of a company governed by the laws of a U.S.

jurisdiction, and may, together with our charter documents, have the effect of delaying, deferring or discouraging another party from acquiring control of us by means of a tender offer, a proxy contest or otherwise, or may affect the price an acquiring party would be willing to offer in such an instance.

The material differences between the BCA and Delaware General Corporation Law, or the DGCL, that may have the greatest such effect include but are not limited to the following:

(i) for material corporate transactions (such as mergers and amalgamations, other extraordinary corporate transactions or amendments to our articles), the BCA generally requires a two‑thirds majority vote by shareholders, whereas the DGCL generally only requires a majority vote;

and (ii) under the BCA, a holder of 5% or more of our common shares can requisition a special meeting of shareholders, whereas such right does not exist under the DGCL.

The material differences between the QBCA and Delaware General Corporation Law, or the DGCL, that may have the greatest such effect include but are not limited to the following:

(i) for material corporate transactions (such as mergers and amalgamations, other extraordinary corporate transactions or amendments to our articles), the QBCA generally requires a two-thirds majority vote by shareholders, whereas the DGCL generally only requires a majority vote;

and (ii) under the QBCA, a holder of 5% or more of our common shares can requisition a special meeting of shareholders, whereas such right does not exist under the DGCL.

Our bylaws and certain Canadian legislation contain provisions that may have the effect of delaying or preventing certain change in control transactions or shareholder proposals.

Certain provisions of our bylaws and certain Canadian legislation, together or separately, could discourage or delay certain change in control transactions or shareholder proposals.

Our bylaws contain provisions that establish certain advance notice procedures for nomination of candidates for election as directors at shareholders’

Our bylaws contain provisions that establish certain advance notice procedures for nomination of candidates for election as directors at shareholders’ meetings.

The BCA requires that any shareholder proposal that includes nominations for the election of directors must be signed by one or more holders of shares representing in the aggregate not less than 5% of the shares or 5% of the shares of a class or series of shares of the corporation entitled to vote at the meeting to which the proposal is to be presented.

The Investment Canada Act requires that a non‑Canadian must file an application for review with the Minister responsible for the Investment Canada Act and obtain approval of the Minister prior to acquiring control of a “Canadian business”

within the meaning of the Investment Canada Act , where prescribed financial thresholds are exceeded.

The Investment Canada Act requires that a non-Canadian must file an application for review with the Minister responsible for the Investment Canada Act and obtain approval of the Minister prior to acquiring control of a “Canadian business” within the meaning of the Investment Canada Act , where prescribed financial thresholds are exceeded.

Furthermore, limitations on the ability to acquire and hold our common shares may be imposed by the Competition Act (Canada).

3 unchanged sentences

UNRESOLVED STAFF COMMENTS.

Our headquarters is currently located in Montréal (Québec), Canada and consists of 7,700 square feet of leased office space under a lease that expires in November 2020.

Our headquarters is currently located in Montréal (Québec), Canada and consists of 7,700 square feet of leased office space under a lease that expires in November 2025.

We also have a U.S.

subsidiary in Charlotte, North Carolina.

subsidiary based in Charlotte, North Carolina.

We believe that our facilities are adequate to meet our current needs.

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