Item 1A. Risk Factors
ITEM 1A.
RISK FACTORS
Other than set forth below,
there have been no material changes in our risk factors set forth in “ Risk Factors in Part I , “ Item 1A ”.
in our 2024 Form 10-K. The risk factor described therein and set forth below could materially adversely affect our business, financial
condition, or results of operations. This Quarterly Report on Form 10-Q also contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain
factors, including these risks. Additional risks not currently known or currently material to us may also harm our business.
We may not be able to maintain compliance
with the continued listing requirements of The Nasdaq Capital Market.
To maintain continued listing
on The Nasdaq Capital Market, we must satisfy minimum financial and other requirements. For example, Nasdaq Listing Rule 5550(b)(1) requires
companies listed on the Nasdaq Capital Market to maintain stockholders’ equity of at least $2.5 million for continued listing. As
of March 31, 2025, our stockholders’ equity was $12.2 million and there can be no assurance that we will be able to maintain or
increase our stockholders’ equity in the future. If our stockholders’ equity falls below $2.5 million, as a result of operating
losses or for other reasons, or if we are unable to demonstrate to Nasdaq’s satisfaction that we subsequently regained compliance
with this requirement, Nasdaq will notify us of such non-compliance. If we receive such notice from Nasdaq, in accordance with the Nasdaq
Listing Rules, we will have 45 calendar days from the date of the notification to submit a plan to regain compliance with Nasdaq Listing
Rule 5550(b)(1). If our compliance plan is accepted, we may be granted up to 180 calendar days from the date of the initial notification
to evidence compliance. If our compliance plan is not accepted or we are otherwise unable to evidence compliance within Nasdaq’s
allotted timeframe, Nasdaq may take steps to delist our Common Stock.
In addition, Nasdaq Listing
Rule 5550(a)(2) requires a minimum bid price of at least $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure
to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. Although the
Company is currently in compliance with this requirement, there can be no assurance that we will be able to maintain compliance. We have
in the past effected reverse stock splits of our Common Stock in order to regain or maintain compliance with this requirement (most recently
on July 5, 2024). Nasdaq Listing Rule 5810(c)(3)(A)(iv) states that any listed company that fails to meet this requirement and has effected
a reverse stock split over the prior one-year period, or has effected one or more reverse stock splits over the prior two-year period
with a cumulative ratio of 250 shares or more to one, may not be eligible for an automatic 180-day grace compliance period and the Nasdaq
Listing Qualifications Department is obligated to immediately issue a delisting determination. Therefore, if we were to fall out of compliance
with the minimum bid price requirement prior to July 5, 2025, we would not be able to effect a reverse stock split and would immediately
be issued a delisting determination.
Such a delisting would have
an adverse effect on the market liquidity of our securities, decrease the market price of our securities, result in the potential loss
of confidence by investors, suppliers, customers and employees and fewer business development opportunities, and adversely affect our
ability to obtain financing for the continuation of our operations. We actively monitor our stockholders’ equity and minimum
bid price and will consider any and all options available to us to maintain compliance with Nasdaq Listing Rules 5550(b)(1) and (a)(2).
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Changes in U.S. and international trade
policies may adversely impact our business and operating results.
From time to time, proposals
are made to significantly change existing trade agreements and relationships between the U.S. and other countries. In recent years, the
U.S. government has implemented substantial changes to U.S. trade policies, including import restrictions, increased import tariffs and
changes in U.S. participation in multilateral trade agreements. Because some of our vendors, manufactures and suppliers are located in
other foreign countries, we are exposed to the possibility of product supply disruption and increased costs in the event of changes in
the policies, laws, rules and regulations of the United States or foreign governments, as well as political unrest or unstable economic
conditions in foreign countries. The U.S. government has indicated its intent to adopt a new approach to trade policy and in some cases
to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements. For example, in February 2025,
President Donald Trump signed executive orders imposing a 25% tariff on certain imports from Mexico and Canada, and in April 2025, up
to 145% tariffs on certain imports from China. In April 2025, President Donald Trump also announced a plan for reciprocal tariffs and
there have been statements from the current administration regarding additional tariffs on certain industries, including the pharmaceutical
industry. Our supply may in the future be subject to these tariffs, which could increase our manufacturing costs and could make our products,
if successfully developed and approved, less competitive than those of our competitors whose inputs are not subject to these tariffs.
We may otherwise experience supply disruptions or delays, and our suppliers may not continue to provide us with clinical supply in our
required quantities, to our required specifications and quality levels or at attractive prices. Such disruption could have adverse effects
on the development of our product candidates and our business operations.
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
No sales or issuances of unregistered
securities occurred that have not previously been disclosed in a Current Report on Form 8-K.
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
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