Risk Factors.
−Removed: Relief Therapeutics has filed a complaint against us regarding the implementation of our Collaboration Agreement.
−Removed: We entered into a Collaboration Agreement with Relief (the “Collaboration Agreement”) on September 18, 2020.
−Removed: The Collaboration Agreement provided that Relief had the right to fund development costs related to Aviptadil for respiratory diseases in exchange for a predetermined division of profits and we had the right to continue its development program with other investor funds should Relief not provide funding.
−Removed: Shortly following the entry into the Collaboration Agreement, however, a number of disputes arose between Relief and the Company, including with respect to the scope of clinical trials of Aviptadil for treatment of COVID-19 respiratory failure and the stability of the original formulation for Aviptadil.
−Removed: In February 2021, Relief ceased funding further development of Aviptadil for treatment of COVID-19 and has refused to fund clinical trials for its inhaled use.
−Removed: Furthermore, Relief has not funded the cost of reformulation necessary to develop a shelf stable product (reformulation as ZYESAMI).
−Removed: On October 6, 2021, Relief filed a complaint in New York State Court, claiming that we failed to honor our obligations under the Collaboration Agreement.
−Removed: Relief’s complaint seeks several remedies, including damages for alleged breaches of the terms of the Collaboration Agreement.
−Removed: We believe that the claims are baseless and without merit.
−Removed: However, the parties to the lawsuit have agreed to engage in an effort to amicably resolve the litigation and have agreed to hold a mediation in early January 2022.
−Removed: If the mediation does not resolve the dispute, the Company intends to defend itself vigorously and to prosecute significant counterclaims against Relief.
−Removed: There can be no assurance, however, that we will be able to successfully resolve the dispute through mediation or that, in the event the dispute continues in litigation, that we will be successful in our opposition to Relief’s claims.
−Removed: In the event of an adverse ruling, there can be no assurance that we would not be required to pay damages in an amount that may have a material adverse effect on our business or business prospects.
−Removed: We are no longer a “controlled company” under the corporate governance rules of Nasdaq.
−Removed: However, during the applicable phase-in periods we may continue to rely on exemptions from certain corporate governance standards, which limit the presence of independent directors on our Board of Directors or committees of the Board of Directors.
−Removed: Previously, Jonathan Javitt and Daniel Javitt controlled the votes of the majority of our common stock.
−Removed: As a result, we were a “controlled company” for purposes of the Nasdaq corporate governance rules and were exempt from certain governance requirements otherwise required by Nasdaq, including requirements that we have a nominating and corporate
−Removed: governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities
−Removed: We are no longer a “controlled company” under the corporate governance rules of Nasdaq.
−Removed: Under the Nasdaq listing requirements, a company that ceases to be a “controlled company” must comply with the independent board committee requirements as they relate to the nominating and corporate governance and compensation committees no later than the following phase-in schedule:
−Removed: (1) one independent committee member at the time it ceases to be a controlled company, (2) a majority of independent committee members within 90 days of the date it ceases to be a controlled company and (3) all independent committee members within one year of the date it ceases to be a controlled company.
−Removed: Additionally, the Nasdaq listing requirements provide a 12-month phase-in period from the date a company ceases to be a “controlled company” to comply with the majority independent board requirement.
−Removed: At this time, the majority of our directors are independent, as are a majority of the members of each of our committees while the nominating and corporate governance committee is not made up solely of independent directors.
−Removed: Until we are fully subject to these requirements, however, our stockholders will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq.
+Added: We have disclosed the risk factors that materially affect our business, financial condition or results of operations under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 31, 2022 (the “Annual Report on Form 10-K”).
+Added: There have been no material changes from the risk factors previously disclosed.
+Added: You should carefully consider the risk factors set forth in the Annual Report on Form 10-K and other information set forth elsewhere in this Quarterly Report on Form 10-Q.
+Added: You should be aware that these risk factors and other information may not describe every risk that we face.
+Added: Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, or may not be able to assess, also may materially adversely affect our business, financial condition and/or operating results.
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.