What changed in this filing

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Item 1A. Risk Factors

2025-09-23 compared with 2024-09-30 · 68 added, 48 removed, 559 unchanged (17% of the section changed)

17 unchanged sentences

However, we do not anticipate receiving significant milestone payments for at least the next year from the issuance of this Annual Report and may never receive significant milestone payments.

On August 14, 2025, we entered into a Research Collaboration, License and Patent Assignment Agreement (the “Agreement”) with Boehringer Ingelheim to research, develop and commercialize first-in-class melanocortin receptor-targeted peptides developed by Palatin for the treatment of retinal diseases, including diabetic retinopathy.

Under the terms of the Agreement, Palatin assigned certain patent rights to Boehringer Ingelheim, and Palatin will conduct collaborative research with Boehringer Ingelheim at Boehringer Ingelheim’s expense focused on development during a two-year period, which Boehringer Ingelheim has the right to extend by up to 6 months.

Under the terms of the Agreement, Palatin received an upfront payment of €2.0 million ($2.3 million USD), and will receive up to €18.0 million ($21.2 million USD) in near-term research milestone payments, and up to €260 million ($307.0 million USD) in success-based development, regulatory, and commercial milestone payments, plus tiered royalties on net commercial sales of Products.

The royalty payments are subject to reduction due to patent expiration, generic competition and payments made under certain licenses for third-party intellectual property.

The Agreement will continue, on a product-by-product and country-by-country basis, until the expiration of the applicable royalty term, unless earlier terminated.

Boehringer Ingelheim has the right to terminate the Agreement for any reason after a specified notice period.

Each party has the right to terminate the Agreement on account of the other party’s bankruptcy or material, uncured breach.

For the foreseeable future, we will have to fund our operations and capital expenditures from license, royalty and contract revenue under license agreements, existing cash balances and outside sources of financing, which may not be available on acceptable terms, if at all.

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We intend to focus future efforts on our bremelanotide combination products MC1R product candidates, primarily for ocular indications.

As of June 30, 2024, we had cash, cash equivalents and marketable securities of $9.5 million, with current liabilities of $9.7 million.

Based on our available cash, cash equivalents and marketable securities, we have concluded that substantial doubt exists about our ability to continue as a going concern for one year from the date our consolidated financial statements are issued and we are seeking additional funding to complete development activities and required clinical trials for our MC1r product candidates and, if those clinical trials are successful (which we cannot predict), to complete submission of required regulatory applications to the FDA.

As of June 30, 2025, we had cash and cash equivalents of $2.6 million, with current liabilities of $8.0 million.

Based on our available cash and cash equivalents, we have concluded that substantial doubt exists about our ability to continue as a going concern for one year from the date our consolidated financial statements are issued and we are seeking additional funding to complete development activities and required clinical trials for our MC1R product candidates and, if those clinical trials are successful (which we cannot predict), to complete submission of required regulatory applications to the FDA.

We may raise additional funds through public or private equity or debt financings, collaborative arrangements on our product candidates, or other sources.

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The commercial success of Vyleesi for HSDD is a component of our corporate strategy, but we may not receive significant milestone payments under our purchase agreement with Cosette.

In December 2023 we sold Vyleesi to Cosette under a purchase agreement providing for contingent, sales-base milestone payments of up to $159 million.

In December 2023 we sold Vyleesi to Cosette under a purchase agreement providing for contingent, sales-based milestone payments of up to $159 million.

We do not know whether or to what extent Cosette will meet milestone payment benchmarks.

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As a result, our share price would likely decline significantly, and we would have difficulty raising necessary capital for future projects.

The commercial success of peptides assigned to Boehringer Ingelheim is a component of our corporate strategy, but we may not receive significant milestone payments under our agreement with Boehringer Ingelheim.

In August 2025, we entered into a Research Collaboration, License and Patent Assignment Agreement with Boehringer Ingelheim to research, develop and commercialize first-in-class melanocortin receptor-targeted peptides developed by Palatin for the treatment of retinal diseases, including diabetic retinopathy.

Under the terms of the Agreement, Palatin assigned certain patent rights to Boehringer Ingelheim (the “Assigned Patents”), and Palatin will conduct collaborative research with Boehringer Ingelheim at Boehringer Ingelheim’s expense, focused on development during a two-year period, which Boehringer Ingelheim has the right to extend by up to 6 months.

Under the terms of the agreement, Palatin received an upfront payment of €2.0 million ($2.3 million USD) and will receive, up to €18.0 million ($21.2 million USD) in near-term research milestone payments, and up to €260 million ($307.0 million USD) in success-based development, regulatory, and commercial milestone payments, plus tiered royalties on net commercial sales of Products.

The royalty payments are subject to reduction due to patent expiration, generic competition and payments made under certain licenses for third-party intellectual property.

The Agreement will continue, on a product-by-product and country-by-country basis, until the expiration of the applicable royalty term, unless earlier terminated.

Boehringer Ingelheim has the right to terminate the Agreement for any reason after a specified notice period.

Each party has the right to terminate the Agreement on account of the other party’s bankruptcy or material, uncured breach.

The clinical and commercial success of drug products by Boehringer Ingelheim will depend on a number of factors, including the following:

timely completion of, or need to conduct additional clinical trials and studies, for our product candidates, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the accurate and satisfactory performance of third-party contractors;

the ability to demonstrate to the satisfaction of the FDA or other regulatory agencies the safety and efficacy of future product candidates through clinical trials;

Boehringer Ingelheim’s ability to successfully manufacture product candidates;

the prevalence and severity of adverse events experienced with product candidates, approved products or any future product candidates;

the timely receipt of necessary marketing approvals from the FDA and similar foreign regulatory authorities;

the availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing treatments;

the ability to manufacture clinical trial supplies of any future product candidates and to develop, validate and maintain a commercially viable manufacturing process that is compliant with current GMP.

If Boehringer Ingelheim fails to satisfy any one of these prerequisites for commercial success, we could experience significant delays or may not receive any royalties and milestone payments.

Ongoing military conflict could cause geopolitical instability, economic uncertainty, financial markets volatility and capital markets disruption, which may adversely affect our revenue, financial condition, or results of operations.

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In addition, there is a risk that one or more of our current service providers, manufacturers, or other partners may be adversely impacted by deteriorating economic conditions, which could directly affect our ability to attain our operating goals and to accurately forecast and plan our future business activities.

Our product candidates including our combination products for treatment of obesity and ED, as well as PL9643 for dry eye disease and PL8177 for the treatment of ulcerative colitis, are still in the early stages of development and remain subject to clinical testing and regulatory approval.

Our product candidates including our combination products for treatment of obesity and ED and our new products for treatment of obesity, as well as PL9643 for dry eye disease and PL8177 for the treatment of ulcerative colitis, are still in the early stages of development and remain subject to clinical testing and regulatory approval.

If we are unable to successfully develop and test our product candidates, we will not be successful.

Our product candidates, including the combination products bremelanotide and a PDE5i agent and bremelanotide and tirzepatide or another GLP-1 agonist, PL9643 for dry eye disease, and PL8177 for the treatment of ulcerative colitis, are at various stages of research and development, will require regulatory approval, and may never be successfully developed or commercialized.

Our product candidates, including the combination products bremelanotide and a PDE5i agent and bremelanotide and tirzepatide or another GLP-1 agonist, an extended half-life peptide for treatment of obesity, an orally available small molecule for treatment of obesity, PL9643 for dry eye disease, and PL8177 for the treatment of ulcerative colitis, are at various stages of research and development, will require regulatory approval, and may never be successfully developed or commercialized.

Our product candidates will require significant further research, development and testing before we can seek regulatory approval to market and sell them.

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We may not be able to secure and maintain suitable research institutions or organizations to conduct our clinical trials.

Even if our product candidates receive regulatory approval, they may never achieve market acceptance, in which case our business, financial condition and results of operation will be materially adversely affected.

Regulatory approval for the marketing and sale of any of our product candidates does not assure the product’s commercial success.

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If side effects emerge that can be linked to any of our product candidates (either while they are in development or after they are approved and on the market), we may be required to perform lengthy additional clinical trials, change the labeling of any such products, or withdraw such products from the market, any of which would hinder or preclude our ability to generate revenues.

If we identify side effects or other problems occur in future clinical trials, we may be required to terminate or delay clinical development of the product candidate.

If we identify side effects or if other problems occur in future clinical trials, we may be required to terminate or delay clinical development of the product candidate.

Furthermore, even if any of our product candidates receive marketing approval, as greater numbers of patients use a drug following its approval, if the incidence of side effects increases or if other problems are observed after approval that were not seen or anticipated during pre-approval clinical trials, or if the incidence of side effects increase or other problems are observed with Vyleesi, a number of potentially significant negative consequences could result, including:

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If we are unable to establish sales and marketing capabilities within our organization or enter into and maintain agreements with third parties to market and sell our product candidates, we may be unable to generate product revenue.

If any of our products candidates are approved by the FDA or other regulatory authorities, we must enter into agreements with third parties to market these product candidates or develop marketing, distribution and selling capacity and expertise, which will be costly and time consuming, or enter into agreements with other companies to provide these capabilities.

If any of our product candidates are approved by the FDA or other regulatory authorities, we must enter into agreements with third parties to market these product candidates or develop marketing, distribution and selling capacity and expertise, which will be costly and time-consuming, or enter into agreements with other companies to provide these capabilities.

We may not be able to enter into suitable agreements on acceptable terms, if at all.

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Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise.

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

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

In the ordinary course of our business, we collect, store and transmit confidential information.

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HIPAA, which created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters;

HIPAA, as amended by the Health Information Technology and Clinical Health Act, and its implementing regulations, which imposes certain requirements relating to the privacy, security, and transmission of individually identifiable health information;

HIPAA, as amended by the Health Information Technology and Clinical Health Act, and its implementing regulations, which impose certain requirements relating to the privacy, security, and transmission of individually identifiable health information;

The federal physician sunshine requirements under the Affordable Care Act, which require manufacturers of drugs, devices, biologics, and medical supplies to report annually to the U.S.

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and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws.

In addition, recent health care reform legislation has strengthened these laws.

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REMS may include requirements for additional training for health care professionals, safety communication efforts and limits on channels of distribution, among other things.

The sponsor would be required to evaluate and monitor the various REMS activities and adjust them if need be.

The sponsor would be required to evaluate and monitor the various REMS activities and adjust them if needed.

The FDA also may impose various civil or criminal sanctions for failure to comply with regulatory requirements, including withdrawal of product approval.

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At present, foreign marketing authorizations are applied for at a national level, although within the European Community (“EC”), registration procedures are available to companies wishing to market a product to more than one EC member state.

If the regulatory authority is satisfied that adequate evidence of safety, quality and efficiency has been presented, a marketing authorization will be granted.

If the regulatory authority is satisfied that adequate evidence of safety, quality and efficacy has been presented, a marketing authorization will be granted.

If we do not obtain, or experience difficulties in obtaining, such marketing authorizations, our business, financial condition and results of operations may be materially adversely affected.

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In the U.S., there have been several recent congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of drugs under Medicare, and reform government program reimbursement methodologies for drug products.

For example, at the federal level, during the former Trump administration there were multiple executive orders issued, initiatives implemented and calls for legislation from Congress to reduce drug prices, increase competition and reduce out of pocket costs of drugs for patients.

The likelihood of implementation of any of the former Trump administration healthcare reform initiatives is uncertain, particularly in light of the Biden administration.

Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payers.

For example, at the federal level, during both the former and current Trump administration there were multiple executive orders issued, initiatives implemented and calls for legislation from Congress to reduce drug prices, increase competition and reduce out of pocket costs of drugs for patients.

In addition, individual states in the U.S.

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These licenses may not be available on acceptable terms, or at all.

Even if we are able to obtain a license, the license would likely obligate us to pay license fees or royalties or both, and the rights granted to us might be nonexclusive, which could result in our competitors gaining access to the same intellectual property.

Even if we are able to obtain a license, the license would likely obligate us to pay license fees, royalties or both, and the rights granted to us might be nonexclusive, which could result in our competitors gaining access to the same intellectual property.

Ultimately, we could be prevented from commercializing a product or be forced to cease some aspect of our business operations, if, as a result of actual or threatened patent infringement claims, we are unable to enter into licenses on acceptable terms, if at all.

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We may not be able to protect our intellectual property rights throughout the world.

Filing, prosecuting, and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States.

Filing, prosecuting, and defending patents for product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States.

In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States and in some cases may even force us to grant a compulsory license to competitors or other third parties.

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Likewise, if our financial statements are not filed on a timely basis, we could be subject to sanctions or investigations by the stock exchange on which our ordinary shares are listed, the SEC or other regulatory authorities.

In either case, there could result a material adverse effect on our business.

In either case, this could result a material adverse effect on our business.

Failure to timely file will cause us to be ineligible to utilize short-form registration statements, which may impair our ability to obtain capital in a timely fashion to execute our business strategies or issue shares to effect an acquisition.

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If one or more equity research analysts ceases coverage of us, or fails to publish reports on us regularly, demand for our stock could decrease, which in turn could cause our stock price or trading volume to decline.

Holders of our Series A Preferred Stock may have interests different from our common stockholders.

Holders of our Series A Preferred Stock and Series D Preferred Stock may have interests different from our common stockholders.

We are permitted under our certificate of incorporation to issue up to 10,000,000 shares of preferred stock.

We can issue shares of our preferred stock in one or more series and can set the terms of the preferred stock without seeking any further approval from our common stockholders.

As of September 27, 2024, there are 4,030 shares of Series A Preferred Stock outstanding.

Each share of Series A Preferred Stock is convertible at any time, at the option of the holder, and such conversion could dilute the value of our common stock to current stockholders and could adversely affect the market price of our common stock.

As of September 19, 2025, there are 4,030 shares of Series A Preferred Stock outstanding, convertible into an aggregate of 278 shares of common stock, and 3,400 shares of Series D Preferred Stock outstanding, convertible into an aggregate of 61,816 shares of common stock.

Each share of Series A Preferred Stock and Series D Preferred Stock is convertible into common stock at any time, at the option of the holder, and such conversion could dilute the value of our common stock to current stockholders and could adversely affect the market price of our common stock.

The conversion price decreases if we sell common stock (or equivalents) for a price per share less than the conversion price or less than the market price of the common stock and is also subject to adjustment upon the occurrence of a merger, reorganization, consolidation, reclassification, stock dividend or stock split which results in an increase or decrease in the number of shares of common stock outstanding.

Upon (i) liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, (ii) sale or other disposition of all or substantially all of the assets of the Company, or (iii) any consolidation, merger, combination, reorganization or other transaction in which the Company is not the surviving entity or in which the shares of common stock constituting in excess of 50% of the voting power of the Company are exchanged for or changed into other stock or securities, cash and/or any other property, after payment or provision for payment of the debts and other liabilities of the Company, the holders of Series A Preferred Stock will be entitled to receive, pro rata and in preference to the holders of any other capital stock, an amount per share equal to $100 plus accrued but unpaid dividends, if any

Upon (i) liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, (ii) sale or other disposition of all or substantially all of the assets of the Company, or (iii) any consolidation, merger, combination, reorganization or other transaction in which the Company is not the surviving entity or in which the shares of common stock constituting in excess of 50% of the voting power of the Company are exchanged for or changed into other stock or securities, cash and/or any other property, after payment or provision for payment of the debts and other liabilities of the Company, the holders of Series A Preferred Stock and Series D Preferred Stock will be entitled to receive, pro rata and in preference to the holders of any other capital stock, an amount per share equal to $100 plus accrued but unpaid dividends, if any

Because we do not anticipate paying any cash dividends on our common stock in the foreseeable future, capital appreciation, if any, will be our stockholders’ sole source of gains.

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78 shares issuable on the conversion of our immediately convertible Series A Preferred Stock, subject to adjustment, for no further consideration;

61,816 shares issuable on the conversion of our immediately convertible Series D Preferred Stock, subject to adjustment, for no further consideration;

44,233 shares issuable upon exercise of stock options with a weighted-average exercise price of $305.92 per share;

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9,980 shares of common stock which have vested under restricted stock unit agreements, but are subject to provisions to delay delivery;

66,666 shares of common stock issuable upon exercise of warrants at an exercise price of $12.50 per share, and expire on May 11, 2026;

2,727,273 shares of common stock issuable upon exercise of Series A warrants at an exercise price of $1.88 per share, and expire on June 24, 2029;

1,333 shares of common stock issuable upon exercise of warrants at an exercise price of $625.00 per share, which expire on May 11, 2026;

37,712 shares of common stock issuable upon exercise of Series B warrants at an exercise price of $94.00 per share.

498,441 Series B warrants expire June 24, 2024 and 1,624,201 Series B warrants are subject to stockholder approval and will expire on the five-year anniversary from the date of stockholder approval;

1,831,503 shares of common stock issuable upon exercise of common warrants at an exercise price of $5.46 per share, and that expire on February 1, 2028;

91,575 shares of common stock issuable upon exercise of the placement agent warrants issued to the placement agent or its designees as compensation in connection with the Company’s February 1, 2024 offering, with an exercise price of $6.825 per share, and an expiration date of February 1, 2028;

90,909 shares of common stock issuable upon exercise of the placement agent warrants issued to the placement agent or its designees as compensation in connection with the Company’s October 2022 offering, with an exercise price of $6.875 per share, and an expiration date of October 31, 2027;

943,396 shares issuable upon exercise of warrants issued in the Company’s October 2023 Offering, with an exercise price of $2.12 per share, and that expire on April 24, 2029;

117,925 shares of common stock issuable upon exercise of the placement agent warrants issued to the placement agent or its designees as compensation in connection with the October 2023 Offering, with an exercise price of $2.65 per share, and an expiration date of October 20, 2028;

5,228 Series B warrants expire on June 24, 2024 and 32,484 Series B warrants expire on July 25, 2030, the five-year anniversary from the date of stockholder approval;

36,630 shares of common stock issuable upon exercise of common warrants at an exercise price of $273.00 per share, which expire on February 1, 2028;

1,831 shares of common stock issuable upon exercise of the placement agent warrants issued to the placement agent or its designees as compensation in connection with the Company’s February 1, 2024 offering, with an exercise price of $341.25 per share, which expire on February 1, 2028;

1,818 shares of common stock issuable upon exercise of the placement agent warrants issued to the placement agent or its designees as compensation in connection with the Company’s October 2022 offering, with an exercise price of $343.75 per share, which expire on of October 31, 2027;

78,153 shares of common stock issuable upon exercise of Series C warrants issued in the Company’s December 2024 Offering, with an exercise price of $43.75 per share, which expire on December 17, 2029;

2,358 shares of common stock issuable upon exercise of the placement agent warrants issued to the placement agent or its designees as compensation in connection with the October 2023 Offering, with an exercise price of $132.50 per share, which expire on October 20, 2028;

39,076 shares of common stock issuable upon exercise of Series D warrants issued in the Company’s December 2024 Offering, with an exercise price of $43.75 per share, which expire on July 25, 2030, the five-year anniversary from the date of stockholder approval;

93,760 shares of common stock issuable upon exercise of Series E warrants issued in the Company’s February 2025 Offering, with an exercise price of $50.00 per share, which expire on August 12, 2030;

146,479 shares of common stock issuable upon exercise of Series F warrants issued in the Company’s May 2025 Offering, with an exercise price of $15.00 per share, which expire on May 8, 2030;

102,720 shares of common stock issuable upon exercise of Series G warrants issued in the Company’s May 2025 Offering, with an exercise price of $7.50 per share, which expire on the earlier of the 31 st calendar day following the date the Company receives the U.S.

Food and Drug Administration acceptance of the Company’s investigational new drug for an in-house obesity treatment compound (long-acting peptide or oral small molecule), provided that, if such date is not a trading day, the termination date shall be immediately following the trading day or May 8, 2027;

43,759 shares of common stock issuable upon exercise of Series H warrants, which are only issued upon exercise of Series G warrants, with an exercise price of $11.25 per share, which expire 24 months from the date of issuance;

123,636 shares of common stock issuable upon exercise of Series I warrants issued in the Company’s June 2025 Series D Convertible Preferred Stock Offering, with an exercise price of $5.50 per share, which expire on July 25, 2030, the five-year anniversary from the date of stockholder approval;

65,433 shares of common stock available for future issuance under our 2011 Stock Incentive Plan.

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Holders of registered underlying shares could resell the shares immediately upon issuance, which could result in significant downward pressure on our stock price.

We are currently not in compliance with the continued listing standards of the NYSE American.

If we fail to regain compliance with the NYSE American listing standards, our common stock could be de-listed from the NYSE American.

Our common stock is listed on the NYSE American, a national securities exchange, under the symbol “PTN”.

As a result, we are subject to NYSE American’s listing standards, which generally mandate that we meet certain requirements relating to stockholders’ equity, market capitalization, aggregate market value of publicly held shares and distribution requirements.

On October 10, 2023, Palatin received a notice from the staff of NYSE American LLC (the “NYSE American”) that Palatin was not in compliance with the Exchange’s continued listing standards under Section 1003(a)(i) and (ii) of the NYSE American Company Guide.

Section 1003(a)(i) requires a listed company to have stockholders’ equity $2 million or more if the listed company has reported losses from continuing operations and/or net losses in two of its three most recent fiscal years, and Section 1003(a)(ii) requires a listed company to have stockholders’ equity of $4 million or more if the listed company has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years.

Palatin is now subject to the procedures and requirements of Section 1009 of the NYSE American Company Guide.

Palatin had until November 9, 2023, to submit a plan (the “Plan”) of actions it has taken or will take to regain compliance with the continued listing standards by April 10, 2025.

Palatin has timely delivered a Plan to the Exchange.

The Exchange has accepted the Plan, and Palatin will be able to continue its listing during the Plan period and will be subject to periodic reviews including quarterly monitoring for compliance with the Plan until it has regained compliance.

There can be no assurance that Palatin will be able to meet milestones set forth in the Plan between now and April 10, 2025.

If we fail to regain compliance with the continued listing requirements of the NYSE American, the NYSE American may take steps to de-list our common stock.

If the NYSE American de-lists our securities for trading on its exchange, we could face significant material adverse consequences, including:

Our common stock has been suspended from trading on the NYSE American.

If we fail to regain compliance with the NYSE American listing standards, our common stock may be delisted from the NYSE American.

On May 7, 2025, Palatin received notice from the NYSE Regulation that it had suspended trading of our common stock and determined to commence proceedings to delist our common stock from the NYSE American as a result of its determination that we are no longer suitable for listing pursuant to Section 1003(f)(v) of the NYSE American Company Guide due to the low selling price of our common stock.

On July 7, 2025, Palatin received notice from NYSE American LLC (“NYSE American” or the “Exchange”) stating that a Listing Qualifications Panel (the “Panel”) of the Exchange’s Committee for Review (the “Committee for Review”) had unanimously determined to affirm the decision of the staff of NYSE American to initiate delisting proceedings of our common stock.

Palatin has exercised its right to have the full Committee for Review reconsider the Panel’s decision and is actively working to resolve the NYSE American listing deficiencies prior to the appeal hearing before the full Committee for Review, which is expected to take place in late September 2025.

However, there can be no assurance that we will be able to timely resolve the NYSE American listing deficiencies

Because our common stock has been suspended from trading on the NYSE American exchange, we face significant material adverse consequences, including:

a limited availability of market quotations for our securities;

reduced liquidity with respect to our securities;

a determination that our shares of common stock are “penny stock” which will require brokers trading in our shares of common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our shares of common stock;

a limited amount of news and analyst coverage for our company;

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

Such a de-listing would likely have a negative effect on the price of our common stock and would impair our investors’ ability to sell or purchase our common stock when investors wish to do so.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Our common shares are considered to be covered securities because they are listed on the NYSE American.

Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.

Further, if we were no longer listed on the NYSE American, our common stock would not be deemed covered securities and we would be subject to regulation in each state in which we offer our securities.

If we were to be delisted from the NYSE American, ,our common stock will not be deemed to be covered securities, and we will be subject to regulation in each state in which we offer our securities.

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