What changed in this filing

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Item 1A. Risk Factors

2025-03-20 compared with 2024-03-28 · 137 added, 146 removed, 1141 unchanged (20% of the section changed)

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• protect our rights in our intellectual property portfolio.

Our revenues for any product candidate for which regulatory approval is obtained will be dependent, in part, upon the size of the markets in the territories for which it gains regulatory approval, the accepted price for the product, the ability to get reimbursement at any price, and whether we own the commercial rights for that territory.

ability to get reimbursement at any price, and whether we own the commercial rights for that territory.

If the number of our addressable disease patients is not as significant as our estimates, the indication approved by regulatory authorities is narrower than we expect, or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenues from sales of such products, even if approved.

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In addition, our operating plan may change as a result of factors currently unknown to us, and we may need additional funds sooner than planned.

If we are unable to obtain

sufficient funding for our operations, we may be delayed in pursuing our development programs for GPS and SLS009.

If we are unable to obtain sufficient funding for our operations, we may be delayed in pursuing our development programs for GPS and SLS009.

Our future capital requirements depend on many factors, including:

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Moreover, global and domestic events, such as public health crises, geopolitical unrest and domestic political events, have caused and could continue to cause uncertainty and volatility in the capital markets which could impact our ability to raise capital.

If adequate funds are not available to us on a timely basis, we may not be able to continue as a going concern or we may be required to delay, limit, reduce or terminate preclinical studies, clinical trials or other development activities for one or more of our product candidates or target indications, or delay, limit, reduce or terminate our establishment of sales and marketing capabilities or other activities that may be necessary to commercialize our product candidates.

If adequate funds are not available to us on a timely basis, we may not be able to continue as a going

concern or we may be required to delay, limit, reduce or terminate preclinical studies, clinical trials or other development activities for one or more of our product candidates or target indications, or delay, limit, reduce or terminate our establishment of sales and marketing capabilities or other activities that may be necessary to commercialize our product candidates.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our product candidates on unfavorable terms to us.

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In such event, there is a possibility that once all senior claims are settled, there may be no assets remaining to pay out to the holders of our common stock.

Debt financing, if available, could include covenants limiting or restricting our ability to take certain actions, such as incurring additional debt, making capital expenditures, entering into licensing arrangements, or declaring dividends and may require us to grant security interests in our assets, including our

intellectual property, and for our subsidiaries to guarantee our obligations.

If we are unable to raise additional funds through equity or debt financings when needed, we may be required to grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

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As of December 31, 2024, we had a cash and cash equivalents balance of approximately $13.9 million.

We expect our existing cash and cash equivalents balance as of December 31, 2023, will be insufficient to fund current planned operations for at least the next 12 months from the date of issuance of our consolidated financial statements for the year ended December 31, 2023, and that we will need to raise additional capital in order to continue our operations as currently planned.

Subsequent to December 31, 2024, we consummated the January 2025 Registered Direct Offering for $25.0 million of gross proceeds.

We expect our existing cash and cash equivalents balance as of December 31, 2024, together with the proceeds from the January 2025 Registered Direct Offering, will be insufficient to fund current planned operations for at least the next 12 months from the date of issuance of our consolidated financial statements for the year ended December 31, 2024, and that we will need to raise additional capital in order to continue our operations as currently planned.

In the event that we are unable to obtain additional financing, we may be unable to continue as a going concern.

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If we cannot continue as a viable entity, our security holders may lose some or all of their investment in us.

Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and its financial condition and results of operations.

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.

For example, on March 10, 2023, Silicon Valley Bank, or SVB, was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation, or the FDIC, as receiver.

Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp.

were each swept into receivership.

If any of our counterparties to any credit agreements, letters of credit or certain other financial instruments that we may enter into in the future were to be placed into receivership, we may be unable to access such funds.

In addition, if any parties with whom we conduct business are unable to access funds pursuant to such instruments or lending arrangements with such a financial institution, such parties’ ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected.

Similar impacts have occurred in the past, such as during the 2008-2010 financial crisis.

Inflation and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates.

There is no guarantee that the U.S.

Department of Treasury, FDIC and Federal Reserve Board will provide access to uninsured funds in the future in the event of the closure of other banks or financial institutions, or that they would do so in a timely fashion.

Although we assess our banking relationships as we believe necessary or appropriate, our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, the financial institutions with which we have arrangements directly, or the financial services industry or economy in general.

services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry.

These factors could involve financial institutions or financial services industry companies with which we have financial or business relationships, but could also include factors involving financial markets or the financial services industry generally.

In addition, investor concerns regarding the U.S.

or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all.

Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses, financial obligations or fulfill our other obligations, result in breaches of our financial and/or contractual obligations or result in violations of federal or state wage and hour laws.

Any of these impacts, or any other impacts resulting from the factors described above or other related or similar factors not described above, could have material adverse impacts on our liquidity and our current and/or projected business operations and financial condition and results of operations.

In addition, any further deterioration in the macroeconomic economy or financial services industry could lead to losses or defaults by parties with whom we conduct business, which in turn, could have a material adverse effect on our current and/or projected business operations and results of operations and financial condition.

For example, a party with whom we conduct business may fail to make payments when due, default under their agreements with us, become insolvent or declare bankruptcy.

Any bankruptcy or insolvency, or the failure to make payments when due, of any counterparty of ours, or the loss of any significant relationships, could have material adverse impacts on our liquidity and our current and/or projected business operations and financial condition and results of operations.

Risks Related to the Development and Regulatory Approval of Our Product Candidates

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• obtaining regulatory approval from the FDA and other regulatory authorities, which have very limited experience with the development and commercialization of WT1 cancer immunotherapies;

• obtaining the components required for the administration of GPS (i.e., GPS, GM-CSF, and Montanide) from three separate sources, the subsequent separate storage requirements for each of these components and the separate delivery of these components to the administration location;

• obtaining the components required for the administration of GPS (i.e., GPS, GM-CSF, Montanide, and device connector for mixing) from separate sources, the subsequent separate storage requirements for each of these components and the separate delivery of these components to the administration location;

• utilizing GPS in combination with other therapies, which may increase the risk of adverse side effects;

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The action plan must describe appropriate diversity goals for enrollment, as well as a rationale for the goals and a description of how the sponsor will meet them.

Our Phase 3 REGAL trial of GPS for AML patients who

have achieved CR2 was initiated before this requirement became effective, but for any future Phase 3 trials we plan to conduct, including any registrational study for SLS009, we must submit a diversity action plan to the FDA by the time we submit plans for such Phase 3, or pivotal study, protocol to the agency for review as part of an IND, unless we are able to obtain a waiver for some or all of the requirements for a diversity action plan.

It is unknown at this time how the diversity action plan may affect the planning and timing of any future Phase 3 trial for our product candidates or what specific information FDA will expect in such plans.

However, initiation of such trials may be delayed if the FDA objects to our proposed diversity action plans for any future Phase 3 trial for our product candidates, and we may experience difficulties recruiting a diverse population of patients in attempting to fulfill the requirements of any approved diversity action plan.

Our Phase 3 REGAL trial of GPS for AML patients who have achieved CR2 was initiated before this requirement became effective, but for any future Phase 3 trials we plan to conduct, including any registrational study for SLS009, we must submit a diversity action plan to the FDA by the time we submit plans for such Phase 3, or pivotal study, protocol to the agency for review as part of an IND, unless we are able to obtain a waiver for some or all of the requirements for a diversity action plan.

It is unknown at this time how the diversity action plan may affect the planning and timing of any future Phase 3 trial for our product candidates but initiation of such trials may be delayed if the FDA objects to our proposed diversity action plans for any future Phase 3 trial for our product candidates.

We may experience difficulties recruiting a diverse population of patients in attempting to fulfill the requirements of any approved diversity action plan.

If we experience delays in the completion of, or termination of, any clinical trials of our current or future product candidates, the commercial prospects of our product candidates could be harmed, and our ability to generate product revenue from any of these product candidates could be delayed or prevented.

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

In addition, we may report interim analyses of only certain endpoints rather than all

In addition, we may report interim analyses of only certain endpoints rather than all endpoints.

Interim data from clinical trials that we complete are subject to the risk that one or more of the clinical outcomes may materially change as more patient data becomes available.

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We have limited data regarding the safety, tolerability and efficacy of GPS administered as monotherapy or in combination with PD-1 inhibitors or for SLS009 as monotherapy and in combination with other therapeutics, including aza/ven.

prevent their regulatory approval, limit the commercial profile of an approved label or result in significant negative consequences following any regulatory approval."

For a further discussion of the safety risks in our trials, see the risk factor herein entitled "Our current and future product candidates, the methods used to deliver them or their dosage levels may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label or result in significant negative consequences following any regulatory approval."

Clinical trials also require the review and oversight of an IRB.

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• continued uncertainties related to the withdrawal of the United Kingdom from the EU (known as "Brexit") and its financial, trade, regulatory and legal implications, which could lead to legal uncertainty and potentially divergent national laws and regulations as the United Kingdom determines which EU laws to replace or replicate, and which may further create global economic uncertainty, which could materially adversely affect our business, business opportunities, results of operations, financial condition, and cash flows;

• production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad, including those that may result from the recent coronavirus outbreak;

• production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad, including those that may result from a pandemic or global health emergency;

• business interruptions resulting from geopolitical actions, including war and terrorism.

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Although we do not currently have any clinical study sites in Russia or Ukraine, economic, political and social conditions resulting from Russia’s invasion of Ukraine could materially disrupt our clinical trials, increase our costs and may disrupt planned clinical development activities.

For example, we currently have clinical sites for our REGAL study in Poland, a country that borders Ukraine and has been impacted by an influx of Ukrainian refugees resulting from Russia’s invasion of Ukraine.

For example, we had clinical sites for our REGAL study in Poland, a country that borders Ukraine and has been impacted by an influx of Ukrainian refugees resulting from Russia’s invasion of Ukraine.

Furthermore, we rely on suppliers in the EU.

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A failure to adequately respond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.

In response to high levels of inflation and recession fears, the U.S.

In response to

high levels of inflation and recession fears, the U.S.

Federal Reserve, the European Central Bank, and the Bank of England have raised, and may continue to raise, interest rates and implement fiscal policy interventions.

Even if these interventions lower inflation, they may also reduce economic growth rates, create a recession, and have other similar effects.

Changes in U.S.

federal policy that affect the geopolitical landscape could give rise to circumstances outside our control that could have negative impacts on our business.

On February 1, 2025, the United States imposed a 25% tariff on imports from Canada and Mexico, which were subsequently suspended for a period of one month, and a 10% additional tariff on imports from China.

Historically, tariffs have led to increased trade and political tensions, between not only the United States and China, but also between the United States and other countries in the international community.

In response to tariffs, other countries have implemented retaliatory tariffs on U.S.

Political tensions as a result of trade policies could reduce trade volume, investment, technological exchange and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets.

Any changes in political, trade, regulatory, and economic conditions, including U.S.

trade policies, could have a material adverse effect on our financial condition or results of operations.

debt ceiling and budget deficit concerns have increased the possibility of credit-rating downgrades and economic slowdowns, or a recession in the United States.

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lawmakers have previously passed legislation to raise the federal debt ceiling on multiple occasions, there is a history of ratings agencies lowering or threatening to lower the long-term sovereign credit rating on the United States given such uncertainty.

On August 1, 2023, Fitch Ratings downgraded the United States’ long-term foreign currency issuer default rating to AA+ from AAA as a result of these repeated debt ceiling and budget deficit concerns.

Since August 1, 2023, Fitch Ratings downgraded and has maintained the United States’ long-term foreign currency issuer default rating to AA+ from AAA as a result of these repeated debt ceiling and budget deficit concerns.

The impact of this or any further downgrades to the U.S.

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If the financial institutions with which we do business enter receivership or become insolvent in the future, there is no guarantee that the Department of the Treasury, the Federal Reserve and the FDIC will intercede to provide us and other depositors with access to balances in excess of the $250,000 FDIC insurance limit, that we would be able to access our existing cash, cash equivalents and investments, that we would be able to maintain any required letters of credit or other credit support arrangements, or that we would be able to adequately fund our business for a prolonged period of time or at all, any of which could have a material adverse effect on our business, financial condition and results of operations.

We cannot predict the impact that the high market volatility and instability of the banking sector more broadly could have on economic

activity and our business in particular.

We cannot predict the impact that the high market volatility and instability of the banking sector more broadly could have on economic activity and our business in particular.

In addition, there is a risk that one or more of our current service providers, manufacturers or other third parties with which we conduct business may not survive difficult economic times, the ongoing conflict between Russia and Ukraine, the war between Israel and Hamas, the instability of the banking sector, and the uncertainty associated with current worldwide economic conditions, which could directly affect our ability to attain our operating goals on schedule and on budget.

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Moreover, China’s legislature has adopted a national security law to substantially change the way Hong Kong has been governed since the territory was handed over by the United Kingdom to China in 1997.

This law increases the power of the central government in Beijing over Hong Kong, limit the civil liberties of residents of Hong Kong and could restrict the ability of businesses in Hong Kong to continue to conduct business or to continue to with business as previously conducted.

This law increases the

power of the central government in Beijing over Hong Kong, limit the civil liberties of residents of Hong Kong and could restrict the ability of businesses in Hong Kong to continue to conduct business or to continue to with business as previously conducted.

State Department has indicated that the United States no longer considers Hong Kong to have significant autonomy from China.

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Any regulatory changes and changes in United States and China relations may have a material adverse effect on our partnerships in China which could materially harm our business and financial condition.

More recently, certain members of the U.S.

Congress have raised national security concerns related to U.S.

clinical trial sponsors utilizing study sites located in China that may be owned or operated by the Chinese military.

It remains to be seen whether the current administration and/or the 119th Congress (2025-26) take steps to restrict or limit the conduct of, or government funding available for, clinical research activities involving China or Chinese entities, or to otherwise require additional due diligence checks or oversight by U.S.

Climate change or legal, regulatory or market measures to address climate change may negatively affect our business, results of operations, cash flows and prospects.

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For example, although no high-grade delayed type hypersensitivity in the skin or systemic anaphylaxis events have been noted after GPS administration in patients treated in our clinical studies to date, it is theoretically possible that such toxicities, or other type of adverse events, may occur in future clinical studies.

As a result of safety or toxicity issues that we may experience in our clinical trials, or negative or inconclusive results from the clinical trials of others for drug candidates similar to our own, we may not receive approval to market any product candidates, which could prevent us from ever generating revenues or achieving profitability.

As a result of safety or toxicity issues that we may experience in our clinical trials, or negative or inconclusive results from the

clinical trials of others for drug candidates similar to our own, we may not receive approval to market any product candidates, which could prevent us from ever generating revenues or achieving profitability.

Results of our trials could reveal an unacceptably high severity and incidence of side effects.

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• the insufficiency of data collected from clinical trials of our product candidates to support the submission and filing of a BLA, NDA or other submission or to obtain regulatory approval;

• the insufficiency of a single Phase 3 clinical trial of GPS in AML for regulatory approval in that indication;

• the insufficiency of a single pivotal or Phase 3 clinical trial of our product candidate(s) for regulatory approval in an indication;

• failure to obtain approval of our manufacturing processes or facilities of third-party manufacturers with whom we contract for clinical and commercial supplies or our own manufacturing facility;

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The FDA or a comparable foreign regulatory authority may require more information, including additional preclinical or clinical data to support approval or additional studies, to support a marketing approval decision, which may delay or prevent approval and our commercialization plans, or we may decide to abandon the development program.

If we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or more limited

indications than we request (including failing to approve the most commercially promising indications), may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate.

If we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request (including failing to approve the most commercially promising indications), may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate.

If we are unable to obtain regulatory approval for one of our product candidates in one or more jurisdictions, or any approval contains significant limitations, we may not be able to obtain sufficient funding to continue the development of that product or generate revenues attributable to that product candidate.

We currently have ODD designation for GPS and SLS009 for certain indications, which might not provide the intended benefit thereof.

We currently have orphan designation for GPS and SLS009 for certain indications, which might not provide the intended benefit thereof.

Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs for relatively small patient populations as Orphan Drug Products.

Under the Orphan Drug Act, the FDA may designate a product as an Orphan Drug Product if it is a drug intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals annually in the United States.

We have received ODD from the FDA for GPS in AML, MPM and MM as well as Orphan Medicinal Product designations from the EMA for GPS in AML, MPM and MM.

In addition, we have received ODD from the FDA for SLS009 for the treatment of AML and PTCL.

Although we have received ODD for GPS and SLS009, there is no guarantee that any of these indications for GPS or SLS009 will be successfully approved by the FDA or the EMA, that GPS or SLS009 will be commercially successful in the marketplace, or that another product will not be approved for the same indication ahead of our product candidate.

We have received orphan designations from the FDA and the EMA for GPS in AML, MPM and MM.

In addition, we have received orphan designations from the FDA and the EMA for SLS009 for the treatment of AML and PTCL.

Although we have received orphan designations for GPS and SLS009, there is no guarantee that any of these indications for GPS or SLS009 will be successfully approved by the FDA or the EMA, that GPS or SLS009 will be commercially successful in the marketplace, or that another product will not be approved for the same indication ahead of our product candidate.

Even if we obtain orphan product exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs can be approved for the same disease or condition.

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Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA.

The regulatory

approval process outside the United States generally includes all of the risks associated with obtaining FDA approval as well as risks attributable to the satisfaction of local regulations in foreign jurisdictions.

The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval as well as risks attributable to the satisfaction of local regulations in foreign jurisdictions.

The approval procedures vary among countries and can involve additional nonclinical or clinical testing.

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If the contracted manufacturing source is unreliable or unavailable, we may not be able to manufacture clinical supplies of our product candidates, and our preclinical and clinical testing programs may not be able to move forward and our entire business plan could fail.

The third-party manufacturers we rely on for the manufacture of our product candidates are subject to inspection and approval by regulatory authorities before we can commence the manufacture and sale of any of our product

candidates, and thereafter are subject to ongoing inspection from time to time.

Our third-party manufacturers may not be able to comply with applicable cGMP regulations or similar regulatory requirements outside of the United States.

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Developing commercially viable manufacturing processes is a difficult, expensive and uncertain task, and there are risks associated with scaling to the level required for advanced clinical trials or commercialization, including cost overruns, potential problems with process scale-up, process reproducibility, stability issues, storage issues, consistency and timely availability of reagents or raw materials.

The manufacturing facilities in which our product candidates will be made could be adversely affected by the recent coronavirus outbreak, other pandemics, earthquakes and other natural disasters, equipment failures, labor shortages, lack of adequate temperature controls, power failures, and numerous other factors.

The manufacturing facilities in which our product candidates will be made could be adversely affected by infectious disease outbreaks, pandemics, earthquakes and other natural disasters, equipment failures, labor shortages, lack of adequate temperature controls, power failures, and numerous other factors.

We currently estimate that we have sufficient clinical supplies to support our clinical trials, however, this estimate is dependent on patient enrollment rates and a number of other factors and, accordingly, could change.

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We rely on third parties to conduct our preclinical studies and clinical trials.

If these third parties do not successfully carry out their contractual duties or meet expected deadlines, or if we lose any of our CROs or

other key third-party vendors, we may not be able to obtain regulatory approval for or commercialize our current or future product candidates on a timely basis, if at all.

If these third parties do not successfully carry out their contractual duties or meet expected deadlines, or if we lose any of our CROs or other key third-party vendors, we may not be able to obtain regulatory approval for or commercialize our current or future product candidates on a timely basis, if at all.

Our internal capacity for clinical trial execution and management is limited and therefore we rely heavily on third parties.

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We rely on these parties for the execution of our preclinical studies and clinical trials, including the proper and timely conduct of our clinical trials, and we control only some aspects of their activities.

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

Outsourcing these functions

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

While we have agreements governing the commitments of our third-party vendor services, we have limited influence over their actual performance.

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Our CROs, third-party vendors and contractors have the right to terminate their agreements with us in the event of an uncured material breach.

participating in our clinical trials warrants such termination, if we make a general assignment for the benefit of our creditors or if we are liquidated.

In addition, some of our CROs, third-party vendors and contractors have an ability to terminate their respective agreements with us if it can be reasonably demonstrated that the safety of the subjects participating in our clinical trials warrants such termination, if we make a general assignment for the benefit of our creditors or if we are liquidated.

Identifying, qualifying and managing performance of third-party service providers can be difficult, time consuming and cause delays in our development programs.

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Moreover, we may not be successful in our efforts to establish a strategic alliance or other alternative arrangements for any future product candidates and programs because our research and development pipeline may be insufficient, our product candidates and programs may be deemed to be at too early a stage of development for collaborative effort and third parties may not view our product candidates and programs as having the requisite potential to demonstrate safety and efficacy.

If we license products or acquire businesses, we may not be able to realize the benefit of such

transactions if we are unable to successfully integrate them with our existing operations and company culture.

If we license products or acquire businesses, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture.

We cannot be certain that, following a strategic transaction or license, we will achieve the revenues or specific net income that justifies such transaction.

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If we are unable to obtain or maintain these agreements, we may not be able to clinically develop, formulate, manufacture, obtain regulatory approvals for or commercialize our product candidates.

guarantee that these parties will fulfill their obligations to us under these arrangements in a timely fashion, if at all.

We cannot necessarily control the amount or timing of resources that our contract partners, including 3D Medicines, will devote to our research and development programs, product candidates or potential product candidates, and we cannot guarantee that these parties will fulfill their obligations to us under these arrangements in a timely fashion, if at all.

We may not be able to readily terminate any such agreements with contract partners even if such contract partners do not fulfill their obligations to us.

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We or any collaboration or commercialization partner may not be able to generate sufficient additional data on a timely basis, or at all.

Moreover, changes in either the patent laws or interpretation of the patent

laws in the United States or other countries may diminish the value of our or a collaboration or commercialization partner’s patents or narrow the scope of our or their patent protection.

Moreover, changes in either the patent laws or interpretation of the patent laws in the United States or other countries may diminish the value of our or a collaboration or commercialization partner’s patents or narrow the scope of our or their patent protection.

Changes in the patent laws, regulations, or interpretations thereof in the United States or abroad may diminish the value of our intellectual property.

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The United States Congress periodically considers patent reform legislation aimed at modifying the standards for patentability, patent enforcement procedures, or the rights of patent holders.

Such legislative changes could introduce stricter requirements for patent eligibility, limit the scope of patent protection, or streamline patent challenges.

Such legislative changes could introduce stricter requirements for patent eligibility, limit the scope of patent protection, or

streamline patent challenges.

Any of these changes may weaken the enforceability or value of our existing patents or make it more difficult to obtain new patents for our products or technologies.

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As the medical device, biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that others may assert our commercial product and/or product candidates infringe their patent rights.

If a third-party’s patents were found to

cover our commercial product and product candidates, proprietary technologies, or our uses, we or our collaborators could be enjoined by a court and required to pay damages and could be unable to continue to commercialize our products or use our proprietary technologies unless we or such collaborators obtained a license to the patent.

If a third-party’s patents were found to cover our commercial product and product candidates, proprietary technologies, or our uses, we or our collaborators could be enjoined by a court and required to pay damages and could be unable to continue to commercialize our products or use our proprietary technologies unless we or such collaborators obtained a license to the patent.

A license may not be available to us or our collaborators on acceptable terms, if at all.

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If we engage in Hatch-Waxman litigation, we may also face an FTC challenge with respect to any proposed settlement related to such litigation, which may result in additional expense or penalty.

The FTC also has more recently been questioning pharmaceutical company patent listings in the Orange Book and raising concerns about “improper”

listings that may be intended to discourage competition by follow-on drug developers, and certain members of Congress have been investigating similar issues.

The FTC also has more recently been questioning pharmaceutical company patent listings in the Orange Book and raising concerns about “improper” listings that may be intended to discourage competition by follow-on drug developers, and certain members of Congress have been investigating similar issues.

Accordingly, there could be future changes to federal laws, regulations, or guidelines related to Hatch-Waxman requirements or procedures that could have a material adverse impact on all pharmaceutical innovators, including us.

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For instance, Canada currently provides for an eight-year period of exclusivity for new biological products, and Mexico provides for a five-year period of exclusivity.

Furthermore, in some countries outside of the United States, peptide vaccines, such as GPS, are regulated as chemical drugs rather than as biologics and may or may not be eligible for non-patent exclusivity.

Furthermore, in some countries

outside of the United States, peptide vaccines, such as GPS, are regulated as chemical drugs rather than as biologics and may or may not be eligible for non-patent exclusivity.

If competitors are able to obtain marketing approval for biosimilars referencing our therapeutic candidates, if approved, our future products may become subject to competition from such biosimilars, whether or not they are designated as interchangeable, with the attendant competitive pressure and potential adverse consequences.

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In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent, or to redesign our infringing product candidates, which may be impossible or require substantial time and monetary expenditure.

We may also elect to enter into license agreements in order to settle patent infringement claims prior to litigation, and any such license agreement may require us to pay royalties and other fees that could

be significant.

During the course of any patent or other intellectual property litigation, there could be public announcements of the results of hearings, rulings on motions, and other interim proceedings in the litigation.

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Accordingly, despite our or our licensors’ efforts, we or our licensors may not be able to prevent third parties from infringing upon or misappropriating intellectual property rights we own or control, particularly in countries where the laws may not protect our rights as fully as in the United States.

Litigation could result in substantial costs and diversion of

management resources, which could harm our business and financial results.

Litigation could result in substantial costs and diversion of management resources, which could harm our business and financial results.

In addition, in an infringement proceeding, a court may decide that a patent owned by or licensed to us is invalid or unenforceable, in whole or in part, or may refuse to stop the other party from using the technology at issue on the grounds that our or our licensors’ patents do not cover the technology in question.

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Interference or derivation proceedings provoked by third parties, brought by us or our licensors or collaborators, or brought by the USPTO or any non-U.S.

patent authority may be necessary to determine the priority of inventions or matters of inventorship with respect to our or our licensors’ patents or patent applications.

patent authority may be necessary to determine the priority of inventions or

matters of inventorship with respect to our or our licensors’ patents or patent applications.

We may also become involved in other proceedings, such as reexamination, reissue, or opposition proceedings, inter partes review, post-grant review or other pre-issuance or post-grant proceedings in the USPTO or its foreign counterparts relating to our intellectual property or the intellectual property of others.

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Litigation may be necessary to defend against these types of claims.

Even if we are successful in defending against any such

claims, any such litigation would likely be protracted, expensive, a distraction to our management team, not viewed favorably by investors and other third parties, and may potentially result in an unfavorable outcome.

Even if we are successful in defending against any such claims, any such litigation would likely be protracted, expensive, a distraction to our management team, not viewed favorably by investors and other third parties, and may potentially result in an unfavorable outcome.

If we are unable to protect the confidentiality of our trade secrets and other proprietary information, the value of our technology could be materially adversely affected, and our business could be harmed.

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We have limited control over the protection of trade secrets used by our licensors, collaborators and suppliers.

We rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not to patent, processes for which patents are difficult to enforce, and other elements of our technology, discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents.

We rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable or that we

elect not to patent, processes for which patents are difficult to enforce, and other elements of our technology, discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents.

Any disclosure to or misappropriation by third parties of our confidential proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, including by enabling them to develop and commercialize products substantially similar to or competitive with our current or future product candidates, thus eroding our competitive position in the market.

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To the extent any of our current or future intellectual property is generated through the use of U.S.

government funding, the provisions of the Bayh-Dole Act

may similarly apply.

government funding, the provisions of the Bayh-Dole Act may similarly apply.

Moreover, changes in regulations related to government-funded programs may affect how the government may exercise march-in rights and affect any of our current or future intellectual property rights derived from U.S.

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Key late-stage pipeline agents that are different from GPS have been granted ODD or Fast Track designation due to the unmet need in AML.

Therefore, clinical late-stage companies developing late-stage clinical candidates to treat r/r AML may enter the market before our potential products, such as GlycoMimetics (uproleselan), Delta-Fly Pharma (DFP-10917), and AROG Pharmaceuticals (crenolanib).

A key competitor may be Iomab-b, which is being developed by Actinium Pharmaceuticals.

In late 2022 / early 2023, Actinium announced positive results in its pivotal Phase 3 trial in adults aged 55 and above with active r/r AML.

Therefore, clinical late-stage companies developing late-stage clinical candidates to treat r/r AML may enter the market before our potential products, such as Delta-Fly Pharma (DFP-10917) and AROG Pharmaceuticals (crenolanib).

Actinium Pharmaceuticals, which previously announced in late 2022 / early 2023 positive results in its pivotal Phase 3 trial in adults aged 55 and above with active r/r AML, has since announced that the FDA determined that its Phase 3 trial is not adequate to support a BLA filing for Iomab-B.

With respect to WT1-targeting therapies, we do not believe GPS currently has direct competition in AML in the maintenance setting after CR2.

There are companies engaged in the clinical development of WT-1 targeting therapies;

however, they are not focused on AML at this time, including Astellas (ASP7517) and Cue Biopharma (CUE-102), or are in earlier stages, such as NexImmune (NEXI-001).

With respect to our SLS009 program, we anticipate competition with MEI Pharma, whose voruciclib is in a Phase 1 clinical trial as a monotherapy and in combination with venetoclax for adults with r/r AML.

There may also be competition in one of our other indications, PTCL, from enitociclib, a CDK9 inhibitor under development by Vincerx Pharma as a monotherapy and in combination with venetoclax for the treatment of PTCL.

Furthermore, there are other companies which are in early development stages for their CDK9 inhibitors and targeting other hematological malignancies or solid tumors, including Kronos Bio (KB-0742), Sumitomo Dainippon Pharma (TP-1287),Adastra Pharmaceuticals (zotiraciclib), and Prelude Therapeutics (PRT2527).

While there are companies engaged in the clinical development of WT-1 targeting therapies, they are not currently focused on AML or have since discontinued or paused their development of WT-1 targeting therapies.

With respect to our SLS009 program, we anticipate competition from companies who have been engaged in the clinical development of selective CDK9-targeting therapies.

Vincerx Pharma may be a potential competitor in our other indication, PTCL, with enitociclib, its CDK9 inhibitor, as a monotherapy and in combination with venetoclax.

There are other companies which are in early development stages for their CDK9 inhibitors and targeting other hematological malignancies or solid tumors, including Sumitomo Dainippon Pharma (TP-1287), Cothera Bioscience (zotiraciclib), and Prelude Therapeutics (PRT2527).

Many of our competitors have substantially greater commercial infrastructures and financial, technical and personnel resources than we have.

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Established competitors may invest heavily to quickly discover and develop novel compounds that could make our product candidates obsolete.

In addition, any new product that competes with an approved product must

demonstrate compelling advantages in efficacy, convenience, tolerability, and safety to overcome price competition and to be commercially successful.

In addition, any new product that competes with an approved product must demonstrate compelling advantages in efficacy, convenience, tolerability, and safety to overcome price competition

and to be commercially successful.

If we are not able to compete effectively against our current and future competitors, our business will not grow, and our financial condition and operations will suffer.

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In addition, governments may impose price controls on any of our products that obtain marketing approval, which may adversely affect our future profitability.

More recently, in August 2022, President Biden signed into the law the IRA.

Among other things, the IRA has multiple provisions that may impact the prices of drug products that are both sold into the Medicare program and throughout the United States.

Starting in 2023, a manufacturer of drugs or biological products covered by Medicare Parts B or D must pay a rebate to the federal government if their drug product’s price increases faster than the rate of inflation.

This calculation is made on a drug product-by-drug product basis and the amount of the rebate owed to the federal government is directly dependent on the volume of a drug product that is paid for by Medicare Parts B or D.

Additionally, starting for payment year 2026, CMS will negotiate drug prices annually for a select number of single source Part D drugs without generic or biosimilar competition.

CMS will also negotiate drug prices for a select number of Part B drugs starting for payment year 2028.

More recently, in August 2022, the IRA was signed into law.

Among other things, the IRA (see above “Government Regulation—Healthcare Reform”).

If a drug product is selected by CMS for negotiation, it is expected that the revenue generated from such drug will decrease.

Additional state and federal health care reform measures are expected to be adopted in the future, any of which could limit the amounts that federal and state governments will pay for health care products and services, which could result in reduced demand for certain biopharmaceutical products or additional pricing pressures.

CMS has begun to implement these new authorities and entered into the first set of agreements with drug and biologic manufacturers for negotiated prices of 10 products, which will become applicable for payment year 2026.

However, the IRA’s impact on the pharmaceutical industry in the United States remains uncertain, in part because multiple large pharmaceutical companies and other stakeholders (e.g., the U.S.

Chamber of Commerce) have initiated federal lawsuits against CMS arguing the program is unconstitutional for a variety of reasons, among other complaints.

Those lawsuits are currently ongoing.

In some foreign countries, particularly the member states of the EU, the pricing of prescription pharmaceuticals is subject to governmental control.

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imposing mandatory discounts for certain Medicare Part D beneficiaries as a condition for manufacturers’ outpatient drugs coverage under Medicare Part D;

and establishing a Center for Medicare Innovation at the CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending.

and establishing a Center for Medicare Innovation at the CMS to test innovative

payment and service delivery models to lower Medicare and Medicaid spending.

Regardless of whether or not the ACA is changed or modified by Congress or the U.S.

Supreme Court, we expect both government and private health plans to continue to require health care providers, including health care providers that may one day purchase our products, to contain costs and demonstrate the value of the therapies they provide.

In addition to the IRA’s drug price negotiation provisions summarized above (see the risk factor herein entitled “Even if we are able to commercialize our current or future product candidates, the products may become subject to unfavorable pricing regulations, third-party reimbursement practices or health care reform initiatives, which could harm our business.”), President Biden’s Executive Order 14087, issued in October 2022, called for the CMS Innovation Center to prepare and submit a report to the White House on potential payment and delivery modes that would complement the IRA, lower drug costs, and promote access to innovative drugs.

In February 2023, CMS published its report which described three potential models focusing on affordability, accessibility and feasibility of implementation for further testing by the CMS Innovation Center.

As of January 2024, the CMS Innovation Center continues to test the proposed models and develop implementation plans.

Such models, if implemented, may have a significant impact on the distribution of and reimbursement for our product candidates that receive FDA approval, if any.

Additionally, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices considering the rising cost of prescription drugs and biologics.

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We cannot predict the initiatives that may be adopted in the future.

The continuing efforts of the government, insurance

companies, managed care organizations and other payors of health care services to contain or reduce costs of health care and/or impose price controls may adversely affect:

The continuing efforts of the government, insurance companies, managed care organizations and other payors of health care services to contain or reduce costs of health care and/or impose price controls may adversely affect:

• the demand for our product candidates, if we obtain regulatory approval;

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On January 5, 2024, the FDA granted approval to Florida for the importation of specific prescription medications from Canada.

This initiative aims to provide residents of Florida with access to more affordable drug prices comparable to those paid by Canadians.

This initiative aims to provide residents of Florida with access to more affordable drug prices

comparable to those paid by Canadians.

The noteworthy aspect of this announcement lies in it being the inaugural instance where the FDA has officially sanctioned a state to securely import prescription drugs from an international source.

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• federal civil and criminal false claims laws, including the FCA that can be enforced through civil whistleblower or qui tam actions, and civil monetary penalty laws, prohibit individuals or entities from knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment or approval that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;

• HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any health care benefit program and also created federal criminal laws that prohibit knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for health care benefits, items or services, and further, as amended by HITECH, imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information on entities subject to the law, such as certain health care providers, health plans, and health care clearinghouses, known as covered entities, and their respective business associates that perform services for them that involve the creation, use, maintenance or disclosure of, individually identifiable health information;

obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information on entities subject to the law, such as certain health care providers, health plans, and health care clearinghouses, known as covered entities, and their respective business associates that perform services for them that involve the creation, use, maintenance or disclosure of, individually identifiable health information;

• the federal physician sunshine requirements under the ACA which requires certain manufacturers of drugs, devices, biologics and medical supplies, with certain exceptions, to report annually to HHS information related to payments and other transfers of value to physicians, certain advanced non-physician health care practitioners, and teaching hospitals, and ownership and investment interests held by physicians and other health care providers and their immediate family members and applicable group purchasing organizations;

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In California, the CCPA, which became effective in 2020, broadly defines personal information, gives California residents expanded individual privacy rights and protections, provides for civil penalties for violations, and gives California residents a private right of action for data breaches in certain cases.

Further, the California Privacy Rights Act, or the CPRA, which became effective in 2023 and amends the CCPA, imposes additional obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data.

requirements for higher risk data, and opt outs for certain uses of sensitive data.

It also created a new California Privacy Protection Agency authorized to issue substantive regulations and is expected to result in increased privacy and information security enforcement.

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We will continue to monitor developments related to the CCPA and anticipate additional costs and expenses associated with compliance.

In addition to the CCPA, broad consumer privacy laws recently went into effect in Virginia on January 1, 2023, in Colorado and Connecticut on July 1, 2023, and in Utah on December 31, 2023.

New privacy laws will also become effective in Florida, Montana, Oregon, and Texas in 2024, in Delaware, Iowa, New Hampshire, New Jersey, and Tennessee in 2025, and in Indiana in 2026.

In addition, numerous other states are considering new comprehensive privacy laws.

In addition to the CCPA, numerous other states have either enacted are considering enacting new comprehensive privacy laws.

states, such as New York and Massachusetts have enacted stringent data security laws and numerous other states have proposed similar laws.

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For example, the collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the EU, including personal health data, is subject to the GDPR, which took effect across all Member States of the EEA on May 25, 2018, and as still in effect in the UK as the UK GDPR.

On June 28, 2021, the EU Commission adopted decisions on the UK’s adequacy under the EU GDPR, and the UK continues to operate under this adequacy decision.

On June 28, 2021, the EU Commission adopted

decisions on the UK’s adequacy under the EU GDPR, and the UK continues to operate under this adequacy decision.

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

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This is because the GDPR allows EU member states to derogate from the requirements of the GDPR mainly in regard to specific processing situations (including special category data and processing for scientific or statistical purposes).

Non-compliance with the GDPR may result in monetary penalties of up to €20 million or 4% of worldwide revenue, whichever is greater.

Non-compliance with the GDPR may result in monetary penalties of up to €20 million or 4% of worldwide turnover, whichever is greater.

Moreover, data subjects can claim damages resulting from infringement of the GDPR.

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Compliance with the GDPR is a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with our EU activities.

Further, as referenced above, following the UK’s withdrawal from the EU (i.e., Brexit), and the expiry of the Brexit transition period, which ended on December 31, 2020, the EU GDPR has been implemented in the UK (as the UK

The UK GDPR sits alongside the UK Data Protection Act 2018 which implements certain derogations in the EU GDPR into UK law.

Under the UK GDPR, companies not established in the UK but who process personal data in relation to the offering of goods or services to individuals in the UK, or to monitor their behavior will be subject to the UK GDPR – the requirements of which are (at this time) largely aligned with those under the EU GDPR and as such, may lead to similar compliance and operational costs.

Non-compliance with the UK GDPR may result in monetary penalties of up to £17.5 million or 4% of worldwide revenue, whichever is higher.

Non-compliance with the UK GDPR may result in monetary penalties of up to £17.5 million or 4% of worldwide turnover, whichever is higher.

In addition, we may be unable to transfer personal data from the EU, UK, and other jurisdictions to U.S or other countries due to limitations on cross-border data flows.

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Certain cybersecurity incidents require notice to the affected individuals, contractual partners, regulatory authorities such as the Secretary of HHS and attorneys general, and in some cases, require notice to the media.

Such notice could harm our reputation and our ability to compete, result in significant legal and financial exposure and reputational damages, and loss of confidence in us, all of which could potentially have an adverse effect on our business.

Such notice could

harm our reputation and our ability to compete, result in significant legal and financial exposure and reputational damages, and loss of confidence in us, all of which could potentially have an adverse effect on our business.

Although we have implemented security measures, there is no guarantee we can protect our data from cybersecurity incidents.

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A new pandemic or a resurgence of the COVID-19 pandemic could have adverse economic impacts to us.

Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp.

were each swept into receivership.

requiring additional payments to us could be adversely affected.

Similar impacts have occurred in the past, such as during the 2008-2010 financial crisis.

Inflation and previous increases in interest rates have led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates.

There is no guarantee that the U.S.

These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry.

In addition, investor concerns regarding the U.S.

For example, a party with whom we conduct business may fail to make payments when due, default under their agreements with us, become insolvent or declare bankruptcy.

We will need to grow the size of our organization in the future, and we may experience difficulties in managing this growth.

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We might not be able to attract or retain qualified management and other key personnel in the future due to the intense competition for qualified talent among biotechnology, pharmaceutical and other businesses.

We could have difficulty attracting experienced personnel to our company and may be required to expend significant financial resources in our employment recruitment and retention efforts.

We could have difficulty attracting experienced

personnel to our company and may be required to expend significant financial resources in our employment recruitment and retention efforts.

Many pharmaceutical and biotechnology companies with whom we compete for qualified personnel have greater financial and other resources, different risk profiles and longer histories in the industry than we do.

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In recent years, many changes have been made to applicable tax laws and changes are likely to continue to occur in the future.

For example, legislation enacted in 2017 informally titled, the Tax Cuts and Jobs Act, or the TCJA, made significant changes to corporate taxation, including the reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, the limitation of the tax deduction for net interest expense to 30% of adjusted taxable income (except for certain small businesses), the limitation of the deduction for net operating losses from taxable years beginning after December 31, 2017 to 80% of current year taxable income and the elimination of net operating loss carrybacks generated in taxable years ending after December 31, 2017 (though any such net operating losses may be carried forward indefinitely) and the modification or repeal of many business deductions and credits.

In addition, on March 27, 2020, former President Trump signed into law the “Coronavirus Aid, Relief, and Economic Security Act” or the CARES Act, which included certain changes in tax law intended to stimulate the U.S.

economy in light of the COVID-19 public health emergency, including providing temporary relief from certain aspects of the TCJA that had imposed limitations on the utilization of certain losses, interest expense deductions, and minimum tax credits and provided temporary deferral of certain payroll taxes.

It cannot be predicted whether, when, in what form or with what effective dates new tax laws may be enacted, or regulations and rulings may be enacted, promulgated or issued under existing or new tax laws, which could result in an increase in our or our shareholders’ tax liability or require changes in the manner in which we operate in order to minimize or mitigate any adverse effects of changes in tax law or in the interpretation thereof.

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These NOL carryforwards could expire unused and be unavailable to offset future income tax liabilities.

Under the Tax Act, federal NOLs incurred in tax years ending after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOLs is limited.

Federal NOLs incurred in tax years ending after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOLs is limited.

In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, and certain 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 the ownership of its equity over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income may be limited.

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In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.

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

For example, over the last several years the U.S.

government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities.

Future legislative and regulatory proposals may materially impact the ability of the FDA and other regulatory agencies to operate as they have historically operated.

We cannot be sure whether additional legislative changes or executive orders will be enacted, or whether any of the FDA’s regulations, guidance or interpretations will be changed, or what the impact of such changes on the agency and its scientific review staff, if any, may be.

For example, the next FDA user fee reauthorization package is expected to enter stakeholder negotiations beginning in mid-2025, with any agreement sent to Congress in early 2027 for purposes of initiating the legislative process.

Reauthorization of the prescription drug user fee program would need to be finalized by Congress by the end of

September 2027 in order to avoid a disruption in FDA’s review goals for BLAs and other activities supported by user fees assessed against industry.

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

For example, political disputes in Congress may result in a shutdown of the U.S.

government and in such cases certain regulatory agencies, such as the FDA and the SEC, would have to furlough critical FDA, SEC and other government employees and stop critical activities.

If a prolonged government shutdown were to occur, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business and could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

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These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares.

Our failure to meet the continued listing requirements of The Nasdaq Capital Market could result in a delisting of our common stock.

Our shares of common stock are currently listed on The Nasdaq Capital Market.

If we fail to satisfy the continued listing requirements of Nasdaq, such as the corporate governance requirements, minimum bid price requirement or the minimum stockholder's equity requirement, The Nasdaq Stock Market LLC may take steps to delist our common stock.

A delisting of our common stock from The Nasdaq Capital Market could materially reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock.

In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities.

On December 6, 2023, we received a letter from Nasdaq notifying us that we no longer met Nasdaq's requirements for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(2), or the MVLS Rule, because, for a period of 30 consecutive business days, the market value of our common stock, calculated based upon the most recent total shares outstanding multiplied by the closing bid price per share, had not maintained a minimum of $35.0 million.

In accordance with Nasdaq Listing Rule 5810(c)(3)(C), we were provided a period of 180 calendar days, or until June 3, 2024, in which to regain compliance with the MVLS Rule.

To regain compliance, the market value of our common stock must meet or exceed $35.0 million for a minimum of 10 consecutive business days during the 180-day compliance period.

If we have not regained compliance with the MVLS Rule by June 3, 2024, Nasdaq will provide notice to us that our securities will be subject to delisting, in which case we may appeal the delisting determination to a Nasdaq Hearings Panel.

On March 5, 2024, we received a letter from Nasdaq stating that we have regained compliance under the MVLS Rule by maintaining a market value of our common stock of greater than $35 million for 10 consecutive business, and that the matter is now closed.

On February 14, 2024, we received a letter from Nasdaq notifying us that we no longer met Nasdaq's requirements for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2), or the Minimum Bid Price Requirement, because, for the preceding 30 consecutive business days, our common stock did not maintain a minimum closing bid price of $1.00 per share.

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were provided a period of 180 calendar days, or until August 12, 2024, to regain compliance with the Minimum Bid Price Requirement.

Compliance can be achieved automatically and without further action if the closing bid price of our common stock is at or above $1.00 for a minimum of 10 consecutive business days at any time during the 180-day compliance period, in which case Nasdaq

will notify us of our compliance and the matter will be closed.

If, however, we do not achieve compliance with the Minimum Bid Price Requirement by August 12, 2024, we may be eligible for additional time to comply.

In order to be eligible for such additional time, we will be required to meet the continued listing requirement for market

value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and must notify Nasdaq in writing of our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary.

On March 11, 2024, we received a letter from Nasdaq stating that we have regained compliance under the Minimum Bid Price Requirement by maintaining a minimum closing bid price of our common stock of $1.00 per share for 10 consecutive business days, from February 26, 2024 to March 8, 2024, and that the matter is now closed.

Our common stock currently remains listed on The Nasdaq Capital Market under the symbol SLS.

Our common stock may be delisted from the Nasdaq Capital Market which could negatively impact the price of our common stock, liquidity and our ability to access the capital markets.

The listing standards of the Nasdaq Capital Market provide that a company, in order to qualify for continued listing, must maintain a minimum stock price of $1.00 and satisfy standards relative to minimum stockholders’ equity, minimum market value of publicly held shares and various additional requirements.

If we fail to comply with all listing standards applicable to issuers listed on the Nasdaq Capital Market, our common stock may be delisted.

If our common stock is delisted, it could reduce the price of our common stock and the levels of liquidity available to our stockholders.

In addition, the delisting of our common stock could materially adversely affect our access to the capital markets and any limitation on liquidity or reduction in the price of our common stock could materially

adversely affect our ability to raise capital.

Delisting from the Nasdaq Capital Market could also result in other negative consequences, including the potential loss of confidence by suppliers, customers and employees, the loss of institutional investor interest and fewer business development opportunities.

We have never declared or paid cash dividends on our common stock and we do not anticipate paying cash dividends on our common stock in the foreseeable future.

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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