What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2025-04-15 compared with 2024-04-11 · 267 added, 342 removed, 1172 unchanged (34% of the section changed)

7 unchanged sentences

We have a limited operating history, have incurred significant losses since our inception and anticipate incurring increasing expenses and continuing losses for the foreseeable future.

Our independent registered public accountants and management have expressed substantial doubt as to our ability to continue as a going concern.

We are a commercial-stage medical device and Phase I clinical-stage pharmaceutical company with a limited operating history upon which you can evaluate our business and prospects.

1 unchanged sentence

As of December 31, 2024, we had an accumulated deficit of $279.5 million.

We anticipate incurring increasing research and development and general and administrative expenses related to our operations and transition into a public company for the foreseeable future.

Losses will likely continue and may increase in the future as we continue to incur significant expenses

related to drug development.

We anticipate incurring increased sales and general and administrative expenses related to our operations and transition into a public company for the foreseeable future.

Losses will likely continue and may increase in the future as we continue to incur significant expenses related to drug development.

We may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in revenues, which would further increase our losses.

2 unchanged sentences

Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.

In addition, the Report of Independent Registered Public Accounting Firm to our December 31, 2023, financial statements includes an explanatory paragraph that expressed substantial doubt about our ability to continue as a going concern.

Additionally, our management has independently determined that there is substantial doubt about our ability to continue as a going concern because we have incurred significant operating losses and expect to continue incurring losses for the foreseeable future.

Our financial statements were prepared assuming that we will continue as a going concern and do not include any adjustments that may result from the outcome of this uncertainty.

Without additional financing and based on our sales, operations and research and development plans, our management estimates that our existing cash and cash equivalents as of December 31, 2023, will be insufficient to fund our projected liquidity requirements for the next 12 months, creating substantial doubt about our ability to continue as a going concern, and we may be unable to realize assets and discharge liabilities in the ordinary course of operations.

If we are unable to obtain sufficient funding, we may be forced to delay, scale back, or eliminate some or all of our research and development activities, our financial condition and results of operations will be materially and adversely affected, and we may be unable to continue as a going concern.

Future financial statements may include similar qualifications about our ability to continue as a going concern.

If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern;

investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all.

The Dynavax Agreement, entered into by Legacy TriSalus in connection with its purchase of nelitolimod, requires us to make potentially significant payments to Dynavax before we will have regulatory approval of nelitolimod and be able to generate revenue from sales of nelitolimod.

Pursuant to the Dynavax Agreement, as of the date of this Annual Report, we have paid Dynavax $12 million to date and we may be required to pay Dynavax up to an additional $158 million upon the achievement of certain development and regulatory milestones with respect to nelitolimod.

We will also be required to pay up to $80 million upon achieving certain commercial milestones once sales of nelitolimod have begun.

The Dynavax Agreement also obligates us to pay royalties based on potential future net sales of products containing nelitolimod compound on a product-by-product and country-by-country basis during the applicable royalty term.

Such royalties are subject to reduction by up to 50% in certain circumstances.

Our failure to satisfy these payment obligations or other obligations under the Dynavax Agreement could result in penalties or litigation, which could have a material adverse effect on our business, financial condition, and results of operations.

Our need for additional capital raises substantial doubt about our ability to continue as a going concern.

Until we are able to generate significant revenues or achieve profitability through product sales, we will require substantial additional capital to finance our operations and continue development of our product candidates.

We cannot be certain that such additional financing will be available on terms favorable to us, or at all, which could limit our ability to grow and jeopardize our ability to continue our business operations.

Based on our sales, operations, and research and development plans, we expect that our existing cash and cash equivalents as of December 31, 2023, will be sufficient to fund operations into the second quarter of 2024.

We expect to incur significant expenses and operating losses for the foreseeable future as we continue to invest in the commercialization of TriNav, clinical trials and other development, manufacturing and regulatory activities for TriNav, nelitolimod and our other product candidates, and discovery research and development.

Based on our history of losses, we do not expect that we will be able to fund our longer-term capital and liquidity needs through our cash balances and operating cash flow alone.

This Annual Report includes disclosures regarding management’s assessment of our ability to continue as a going concern as our current liquidity position and recurring losses from operations since inception and negative cash flows from operating activities raise substantial doubt about our ability to continue as a going concern.

As of December 31, 2024, we had $8.5 million in cash and cash equivalents.

Based on our sales, operations, and research and development plans, we expect that our existing cash and cash equivalents will not be sufficient to fund operations for at least the next 12 months from the issuance date of this Annual Report.

As a result, there is substantial doubt about our ability to continue as a going concern.

We expect to incur significant expenses and operating losses for the foreseeable future as we continue to invest in the commercialization of TriNav, and clinical trials and other development, manufacturing and regulatory activities for TriNav, nelitolimod, and our other product candidates, and discovery research and development.

Based on our history of losses, we do not expect that we will be able to fund our longer-term capital and liquidity needs through our cash balances, operating cash flow, and the proceeds from the OrbiMed Credit Agreement alone.

Until we can generate a sufficient amount of revenue, we will need to finance our operations through strategic alliance and licensing arrangements and/or public or private debt and equity financings.

We expect to need to obtain substantial additional funding in connection with our continuing operations and planned activities, including to continue the clinical development of, and seek regulatory approval for, nelitolimod in any indication, to expand our business, to respond to competitive pressure and to make acquisitions.

We anticipate needing to obtain substantial additional funding in connection with our continuing operations and planned activities to expand our business, to respond to competitive pressure and to make acquisitions.

The amount of capital we will need may change depending on, among other things, the success of our efforts to grow revenue, our efforts to continue to effectively manage expenses, the results of our research and development and clinical trials for product candidates, and costs arising from seeking regulatory approvals.

We may not succeed in raising additional funds in a timely manner.

The timing of our need for additional funds will depend on many factors, which are difficult to predict or may be outside of our control, including:

The timing of our need for additional funds will depend on many factors, which are difficult to predict or may be outside of our control, including to continue the clinical development of, and seek regulatory approval for, nelitolimod in any indication.

These factors include:

◦ the revenue received from sales of TriNav;

◦ the costs and timing of research and development programs, including for additional Pressure- Enabled Drug Delivery (“PEDD”) devices;

◦ our ability to access the remaining available loan amount under our OrbiMed Credit Agreement if and when needed;

◦ the scope, progress, results, resources, time and costs of preclinical development, laboratory testing and clinical trials for our current and future product candidates;

13 unchanged sentences

If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of Common Stock.

Any debt financing that we may secure in the future could involve significant fixed payment obligations and restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.

Subject to limited exception, we are prohibited from incurring indebtedness without the prior written consent of OrbiMed pursuant to the OrbiMed Credit Agreement.

Regardless, any debt financing that we may secure in the future could involve significant fixed payment obligations and restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.

We may not be able to obtain additional financing on terms favorable to us, if at all.

2 unchanged sentences

Any of the above events could significantly harm our business, prospects, financial condition, and results of operations and cause the price of Common Stock to decline.

Further, our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions, and the continued disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from geopolitical events, including the wars in Ukraine and the Middle East, and disruptions to the U.S.

banking system due to bank failures, particularly in light of the recent events that have occurred with respect to Silicon Valley Bank, Signature Bank, and First Republic Bank.

Further, our ability to raise additional capital and the interest rate of our term loans under the OrbiMed Credit Agreement may be adversely impacted by potential worsening global economic conditions, and the continued disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from geopolitical events, including the wars in Ukraine and the Middle East, and disruptions to the U.S.

banking system due to bank failures.

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

2 unchanged sentences

We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and licensing arrangements.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of existing stockholders will be diluted, such offerings may reduce the market price of the Common Stock, and the terms may include a preference on liquidating distributions or a preference on dividend payments liquidation or other preferences that adversely affect the rights of existing stockholders.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of existing stockholders will be diluted, such offerings may reduce the market price of the Common Stock, and the terms may include a preference on liquidating distributions or a preference on dividend payments or other preferences that adversely affect the rights of existing stockholders.

Thus, existing holders of our Common Stock bear the risk of our future offerings reducing the market price of our Common Stock and diluting their shareholdings in us.

1 unchanged sentence

We have, and in the future may continue to, sell shares of our Common stock to Yorkville under the SEPA.

In addition, the incurrence of indebtedness would result in increased fixed or variable payment obligations and could involve certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business, including grants of security interests in our intellectual property.

In addition, the OrbiMed Credit Agreement requires us to make payments of interest and principal and subject us to a number of restrictive covenants, including among others, limitations on our ability to incur additional debt;

create liens and encumbrances;

merge, dissolve, merge, dissolve, liquidate or consolidate;

make acquisitions, investments, advances or loans;

dispose of or transfer assets;

pay dividends or make other payments in respect of our capital stock;

amend certain material documents;

redeem or repurchase certain debt;

engage in certain transactions with our affiliates;

enter into certain restrictive agreements;

and license intellectual property rights.

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

2 unchanged sentences

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

We may not be able to generate sufficient cash to service our indebtedness or borrow additional funds pursuant to our Loan Facility.

We have entered into the OrbiMed Credit Agreement, pursuant to which we may borrow up to $50.0 million in senior secured term debt.

Our obligations under the OrbiMed Credit Agreement are secured by substantially all of our assets.

We are subject to a number of affirmative and restrictive covenants pursuant to the OrbiMed Credit Agreement, which limit or restrict our ability to, among others (subject to certain qualifications and exceptions):

create liens and encumbrances;

incur additional indebtedness;

merge, dissolve, liquidate or consolidate;

make acquisitions, investments, advances or loans;

dispose of or transfer assets;

pay dividends or make other payments in respect of our capital stock;

amend certain material documents;

redeem or repurchase certain debt;

engage in certain transactions with our affiliates;

and enter into certain restrictive agreements.

In addition, we are required to maintain at least $5.0 million of unrestricted cash and cash equivalents at all times (which requirement will increase to $10.0 million at all times after March 31, 2025).

Our obligations under the OrbiMed Credit Agreement are subject to acceleration upon the occurrence of an event of default (subject to applicable notice and grace periods).

We are currently in compliance with the OrbiMed Credit Agreement covenants;

however, we currently expect that we expect that we will need to raise additional capital to remain in compliance with the minimum cash threshold.

If we are unable to achieve certain milestones, generate sufficient revenue and maintain certain minimum cash threshold, we may fall out of compliance with these covenants, which could constitute an event of default.

We may also enter into other debt agreements in the future which may contain similar or more restrictive terms.

Our ability to make scheduled monthly payments or to refinance our debt obligations depends on numerous factors, including the amount of our cash reserves and our actual and projected financial and operating performance.

These amounts and our performance are subject to certain financial and business factors, as well as prevailing economic and competitive conditions, some of which may be beyond our control.

We cannot assure you that we will maintain a level of cash reserves or cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our existing or future indebtedness.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructure or refinance our indebtedness.

We cannot assure you that we would be able to take any of these

actions, or that these actions would permit us to meet our scheduled debt service obligations.

Failure to comply with the conditions of or covenants in the OrbiMed Credit Agreement could result in an event of default, which could result in an acceleration of amounts due under the OrbiMed Credit Agreement.

We may not have sufficient funds or may be unable to arrange for additional financing to repay our indebtedness or to make any accelerated payments, and OrbiMed could seek to enforce security interests in the collateral securing such indebtedness, which would materially harm our business and our stock price.

In addition, the OrbiMed Credit Agreement provides up to $15.0 million will be made available on or prior to December 31, 2025, subject to certain revenue requirements.

If we are unable to achieve the revenue requirements by the applicable dates, we would be unable to borrow additional funds pursuant to the Loan Facility, which could negatively impact our ability to fund our operations.

We may issue additional Common Stock from time to time under our equity incentive plans.

6 unchanged sentences

Accordingly, Common Stock registered under such registration statements may be immediately available for sale in the open market.

If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our stockholders if we issue equity securities, cause us to incur debt or assume contingent liabilities, and subject us to other risks.

We may evaluate various acquisitions and strategic partnerships, including licensing or acquiring complementary products, intellectual property rights, technologies, or businesses.

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

• increased operating expenses and cash requirements;

• the assumption or occurrence of additional indebtedness or contingent liabilities;

• the issuance of our equity securities;

• assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integration;

• the diversion of our management’s attention from our existing product programs and initiatives in pursuing such an acquisition or strategic partnership;

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

• risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and related regulatory approvals;

• our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.

In addition, if we undertake acquisitions, we may incur large one-time expenses and acquire intangible assets that could result in significant future amortization expense.

Moreover, we may not be able to locate suitable acquisition opportunities, which could impair our ability to grow or obtain access to technology or products that may be important to the development of our business.

Any acquisitions, strategic investments, entries into new businesses, joint ventures, divestitures, and other transactions could fail to achieve strategic objectives, disrupt our ongoing operations, result in operating difficulties, liabilities and expenses, harm our business, or negatively impact our results of operations.

We may evaluate and consider strategic transactions, combinations, acquisitions, dispositions, joint ventures or similar transactions.

These transactions could be material to our financial condition and results of operations if consummated.

If we are able to identify an appropriate business opportunity, we may not be successful in negotiating favorable terms and/or consummating the transaction and, even if we do consummate such a transaction, we may be unable to obtain the benefits or avoid the difficulties and risks of such transaction.

Any strategic transaction, combination, acquisition, disposition, joint venture or similar transaction will involve risks encountered in business relationships, including:

• difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business;

• inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits;

• difficulties in retaining, training, motivating and integrating key personnel;

• diversion of management’s time and resources from our normal daily operations;

• difficulties in successfully incorporating licensed or acquired technology and rights into our operations;

• difficulties in maintaining uniform standards, controls, procedures, and policies within the combined organizations;

• difficulties in retaining relationships with customers, employees, and suppliers of the acquired business;

• risks of entering markets in which we have no or limited prior experience;

• regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired business;

• assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights, or increase our liability;

• failure to successfully further develop any acquired product candidates or technology;

• liability for activities of the acquired or disposed of business before the acquisition or disposition, including patent and trademark infringement claims, violations of laws, regulatory actions, commercial disputes, tax liabilities, assumed debt and other known and unknown liabilities;

• difficulty in separating assets and replacing shared services;

• potential disruptions to our ongoing businesses;

• unexpected costs and unknown risks and liabilities associated with the specific transaction.

We may not make any strategic transactions, combinations, acquisitions, dispositions, joint ventures or similar transactions, or any future transactions, combinations, acquisitions, dispositions, joint ventures or similar transactions may not be successful, may not benefit our business strategy, may not generate sufficient revenue to offset the associated costs, or may not otherwise result in the intended benefits.

It may take us longer than expected to fully realize the anticipated benefits and synergies of these transactions and those benefits and synergies may ultimately be smaller than anticipated or may not be realized at all, which could adversely affect our business and operating results.

Any strategic transactions, combinations, acquisitions, dispositions, joint ventures or similar transactions may also require us to issue additional equity securities, spend our cash, or incur debt (and increase our interest expense), liabilities, and amortization expenses related to intangible assets or write-offs of goodwill, which could adversely affect our results of operations and the interests of holders of our indebtedness and dilute the economic and voting rights of our stockholders.

In addition, we cannot assure you that any future acquisition of new businesses, products, product candidates or technologies will lead to the successful integration of any products, product candidates or technologies acquired with our existing operations or the successful development of new or enhanced products or that any new or enhanced products, if developed, will achieve market acceptance or prove to be profitable.

Further, we may also choose to divest certain businesses or product lines that no longer fit with our strategic objectives.

If we decide to sell assets or a business, we may have difficulty obtaining terms acceptable to us in a timely manner, or at all.

Additionally, the terms of such potential transactions may expose us to ongoing obligations and liabilities.

Pursuant to the Dynavax Agreement, as of the date of this Annual Report on Form 10-K, we have paid Dynavax $12.0 million to date and we may be required to pay Dynavax up to an additional $158.0 million upon the achievement of certain development and regulatory milestones with respect to nelitolimod.

We will also be required to pay up to $80.0 million upon achieving certain commercial milestones once sales of nelitolimod have begun.

Such royalties are subject to reduction by up to 50% in certain circumstances.

Risks Related to TriNav

1 unchanged sentence

Failure to achieve continued market acceptance of TriNav for any reason will harm our business and future prospects.

We began selling TriNav in 2020 in the United States, and sales of TriNav accounted for substantially all of revenue for the years ended December 31, 2023, and 2022.

Sales of TriNav are expected to continue to account for primarily all of our revenue going forward.

Our ability to execute our growth strategy and become profitable will therefore depend upon the adoption of TriNav by physicians and hospitals, among others.

We began selling TriNav in 2020 in the United States, and sales of TriNav account for primarily all of our revenue and will continue to account for primarily all of our revenue going forward.

Our ability to execute our growth strategy and become profitable will therefore depend upon the adoption of TriNav by physicians and hospitals, among others, and for various conditions where PEDD may be applicable, including liver cancer, multinodular goiters, locally advanced pancreatic cancer, UFEs and prostate embolization.

TriNav is a relatively new drug delivery platform designed to overcome the barriers of the high pressure tumor microenvironment.

5 unchanged sentences

• any safety or effectiveness concerns that arise regarding TriNav;

• the extent of reimbursement by CMS for purchases of TriNav;

• the extent of reimbursement by the Centers for Medicare & Medicaid Services ("CMS") for purchases of TriNav;

• introduction of new products or procedures for delivering drugs into the tumor microenvironment that compete with TriNav.

There is no assurance that TriNav will achieve broad market acceptance among physicians and hospitals.

There is no assurance that TriNav will achieve broad market acceptance among physicians and hospitals or in the conditions for which PEDD maybe applicable.

Any failure of TriNav to satisfy physician or hospital demand or to achieve meaningful market acceptance will harm our business and future prospects.

1 unchanged sentence

Our business is dependent upon the continued adoption of TriNav by hospitals and physicians.

Our future growth and profitability largely depend on our ability to increase physician awareness and adoption of TriNav and on the willingness of physicians to recommend the device to more of their patients.

Our future growth and profitability largely depend on our ability to increase physician awareness and adoption of TriNav for the different conditions for which PEDD may be applicable and on the willingness of physicians to recommend the device to more of their patients.

Physicians may not use our products unless they are able to determine, based on experience, clinical data, medical society recommendations and other analyses, that our product provides a safe and effective treatment alternative for drug delivery.

3 unchanged sentences

• Perceived liability risk generally associated with the use of new products and procedures;

• Lack of sufficient clinical evidence, including long-term data, supporting the clinical benefits of TriNav;

• Lack of sufficient clinical evidence, including long-term data, supporting the clinical benefits of TriNav in the different conditions for which PEDD may be applicable;

• Reluctance to change to or use new products and procedures;

16 unchanged sentences

Any change to TriNav’s reimbursement status that reduces our level of reimbursement could cause TriNav sales to materially decline and impede market adoption.

We presently benefit from various reimbursement codes in the United States, including the following:

• Healthcare Common Procedure Coding System Code ("HCPCS"):

• Current Procedural Terminology for physicians to support reimbursement for physician- rendered healthcare services Codes:

37242 Mapping and 37243 Treatment.

In December 2023, CMS granted a New Technology HCPCS for procedures involving TriNav.

This new code, HCPCS C9797, has been assigned to the Ambulatory Payment Classification ("APC") 5194 - Level 4 Endovascular Procedures.

The new code became effective on January 1, 2024, and may be reported by hospital outpatient departments and ambulatory surgical centers, but there can be no assurance that continuing reimbursement will be available at similar reimbursement rates or at all.

In December 2023, CMS granted a New Technology Healthcare Common Procedure Coding System Code ("HCPCS") for both mapping and therapeutic procedures involving TriNav.

This code, HCPCS C9797, has been assigned to the Ambulatory Payment Classification ("APC") 5194 - Level 4 Endovascular Procedures.

The code became effective on January 1, 2024, and may be reported by hospital outpatient departments and ambulatory surgical centers.

Effective April 1, 2025, TriNav received a second unique and permanent HCPCS code from CMS, C8004, which has been assigned to APC 5193 (Level 3 Endovascular Procedures).

This new code provides reimbursement clarity for mapping procedures conducted prior to TARE.

Although CMS approved a reimbursement amount increase for 2025, there can be no assurance that continuing reimbursement will be available at similar reimbursement rates or at all.

Any reduction in the amount of the reimbursement for TriNav will negatively impact the revenue we are able to generate from the sale of TriNav and may hinder our ability to recoup our total investment in TriNav notwithstanding regulatory approval of the product.

4 unchanged sentences

We currently have limited in-house sales and marketing capabilities.

Until January 1, 2023, we contracted with a limited number of third-party distributors for a significant portion of our commercial sales of TriNav.

continue to further develop an in-house marketing organization and sales force with technical expertise and supporting distribution capabilities to commercialize TriNav, which will require significant capital expenditures, management resources and time, we may be unable to accurately predict the future level of demand for TriNav that will be generated by our existing or potential customers, or the future demand for our medical device products by these customers or new customers.

Although we continue to further develop an in-house marketing organization and sales force with technical expertise and supporting distribution capabilities to commercialize TriNav, which will require significant capital expenditures, management resources and time, we may be unable to accurately predict the future level of demand for TriNav that will be generated by our existing or potential customers, or the future demand for our medical device products by these customers or new customers.

We will also have to compete with other pharmaceutical and biotechnology companies to recruit, hire, train and retain marketing and sales personnel.

1 unchanged sentence

Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact our revenues, results of operations and financial condition.

Further, if we decide to re-enter into arrangements with third parties to perform sales, marketing, and distribution services, our product revenues related to TriNav may be lower than if we were to market, sell and distribute TriNav ourselves.

We also would face competition in our search for third parties to assist with the sales, marketing and distribution efforts of TriNav.

In addition, we have an agreement with a partner in China for the distribution and commercialization of TriNav, if approved in China.

9 unchanged sentences

Risks Related to Nelitolimod and Product Development

We are early in our pharmaceutical development efforts and we have only one pharmaceutical product candidate, nelitolimod, in early clinical development.

If we are unable to advance our product candidates, including nelitolimod, in clinical development for any reason (including due to lack of funding), obtain regulatory approval and ultimately commercialize our product candidates, or experience significant delays in doing so, our business, results of operations, financial condition and prospects may be materially adversely affected.

We are early in our pharmaceutical development efforts for nelitolimod, and if we are unable to advance our product candidates, including nelitolimod in clinical development for any reason (including due to lack of funding), obtain regulatory approval and ultimately commercialize our product candidates, or experience significant delays in doing so, our business, results of operations, financial condition and prospects may be materially adversely affected.

We are in the early stages of our development efforts and have only one product candidate, nelitolimod, in early clinical development.

We have initiated Phase 1 and Phase 1b clinical trials for this product candidate, each of which are focused on a different target indication, specifically:

uveal melanoma, intrahepatic cholangiocarcinoma and hepatocellular carcinoma.

We will need to progress any early product candidates through IND-enabling studies and submit Investigational New Drug applications (“INDs”) to the FDA prior to initiating their clinical development.

Our ability to generate product revenues from our pharmaceutical candidates, which we do not expect will occur for several years, if ever, will depend heavily on the successful development and eventual commercialization of our product candidates.

The success of these product candidates will depend on several factors, including the following:

We have initiated Phase 1 and Phase 1b clinical trials for nelitolimod, each of which are focused on a different target indication, specifically UMLM, ICC and HCC, and pancreatic cancer.

We expect that any continued investigation for ICC and HCC will only continue through IITs.

Based on the changing landscape for second line treatment of uveal melanoma, we do not intend to proceed to Phase II trials for that indication on our own, but we are looking for potential partners to advance that indication.

Our Phase I PERIO-03 clinical trial in pancreatic cancer is enrolled and we anticipate data from the study will be available by the end of 2025, depending on when treatment is completed.

We will need to progress the pancreatic carcinoma indication through IND-enabling studies and submit Investigational New Drug applications (“INDs”) to the FDA prior to initiating their clinical development.

Our ability to generate product revenues from our product candidate, which we do not expect will occur for several years, if ever, will depend heavily on the successful development and eventual commercialization of our product candidate.

The success of this product candidate will depend on several factors, including the following:

◦ successful enrollment in clinical trials and completion of clinical trials and preclinical studies with favorable results;

◦ clearance of INDs by the FDA or similar regulatory filings by comparable foreign regulatory authorities for the conduct of clinical trials of our product candidates and our proposed design of future clinical trials;

◦ demonstrating the safety and efficacy in the proposed indications for use of our product candidates to the satisfaction of applicable regulatory authorities;

◦ clearance of INDs by the FDA or similar regulatory filings by comparable foreign regulatory authorities for the conduct of clinical trials of our product candidate and our proposed design of future clinical trials;

◦ demonstrating the safety and efficacy in the proposed indications for use of our product candidate to the satisfaction of applicable regulatory authorities;

◦ receipt of marketing approvals from applicable regulatory authorities, including New Drug Applications (“NDAs”) from the FDA and maintaining such approvals;

◦ making arrangements with third-party manufacturers for, or establishing, clinical and commercial manufacturing capabilities;

◦ establishing sales, marketing and distribution capabilities and launching commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others;

◦ establishing and maintaining patent and trade secret protection or regulatory exclusivity for our product candidates;

◦ establishing sales, marketing and distribution capabilities and launching commercial sales of our product candidate, if and when approved, whether alone or in collaboration with others;

◦ establishing and maintaining patent and trade secret protection or regulatory exclusivity for our product candidate;

◦ maintaining an acceptable safety profile of our products following approval;

◦ building and maintaining an organization of people who can successfully develop our product candidates.

◦ building and maintaining an organization of people who can successfully develop our product candidate.

The success of our business depends in part on the successful development, regulatory approval, and commercialization of our product candidate, nelitolimod, as well as any other future product candidates, which may never occur.

8 unchanged sentences

Additionally, the FDA may disagree with our interpretation of the data from our pilot studies and clinical trials, or may find the clinical trial design, conduct or results inadequate to demonstrate safety or effectiveness, and may require us to pursue additional clinical trials, which could further delay the clearance or authorization of our product candidates.

If we are unable to demonstrate the safety and effectiveness of product candidates in our clinical trials, we will be unable to obtain the regulatory clearances or authorizations we need to commercialize new products.

If we are unable to demonstrate the safety and

effectiveness of product candidates in our clinical trials, we will be unable to obtain the regulatory clearances or authorizations we need to commercialize new products.

Interim, “topline” and preliminary data from clinical trials of our product candidates may change as more patient data becomes available and are subject to confirmation, audit, and verification procedures that could result in material changes in the final data.

14 unchanged sentences

In later-stage clinical trials, we will likely be subject to more rigorous statistical analyses than in completed earlier-stage clinical trials.

Several companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to a

lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials, and we cannot be certain that we will not face similar setbacks.

Several companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to a lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials, and we cannot be certain that we will not face similar setbacks.

Changing treatment landscapes may also diminish the opportunities for our product candidates leading to termination of their development in general or for certain indications.

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

5 unchanged sentences

Also, we cannot guarantee that any preclinical studies or clinical trials will be conducted as planned or completed on schedule, if at all.

We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons, including challenges resulting from COVID-19, labor shortages, and global supply chain interruptions.

We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons, including challenges resulting from labor shortages and global supply chain interruptions.

Any inability to timely and successfully complete preclinical and clinical development could result in additional costs to us or impair our ability to achieve regulatory and commercialization milestones.

31 unchanged sentences

• ability to monitor patients adequately during and after treatment.

Nelitolimod relies on oligonucleotide TLR agonists.

Use of toll-like receptor (TLR) agonist, including nelitolimod, may negatively impact the immune system.

Serious adverse event data relating to TLR agonists may require us to reduce the scope of or discontinue certain of our pre-clinical or clinical activities.

Nelitolimod is composed, in part, of TLR9 agonist CpG oligonucleotides.

Nelitolimod, an investigational agent in development, is a toll-like receptor 9 (TLR9) agonist which is believed to bind to the TLR9 receptors found on suppressive immune cells including myeloid-derived suppressor cells, antigen-presenting immune cells and other immune cells.

TLRs play a key role in the innate immune system and create a bridge to adaptive immunity.

It is believed that activating TLR9 primes immune cells to promote anti-tumor T-cells.

If nelitolimod or any of our future product candidates in clinical trials or similar products from competitors produce serious adverse event data, we may be required to delay, discontinue, or modify many of our clinical trials or our clinical trial strategy.

2 unchanged sentences

If adverse event data are found to apply to our TLR agonist and/or inhibitor technology as a whole, we may be required to significantly reduce the scope of or discontinue certain of our pre-clinical or clinical activities.

Our long-term prospects are dependent on the success of our development-stage products including nelitolimod, which depend on regulatory approval.

Failure to maintain or obtain regulatory approvals would materially and adversely impact us and our business prospects.

Our long-term prospects are dependent on nelitolimod, currently our sole development-stage immune-oncology product candidate, and early-stage development is inherently risky.

Even if we have early indications of success in clinical development, in order to be able to market nelitolimod in the United States, we must obtain approval from the FDA, and corresponding applications to foreign regulatory agencies must be approved by those agencies before we may sell the product in respective geographic areas.

Obtaining FDA marketing approval and corresponding foreign applications is highly uncertain and we may fail to obtain approval, or might obtain approval in a more limited indication than sought.

The FDA review process is extensive, lengthy, expensive and uncertain, and the FDA or foreign regulatory agencies may delay, limit or deny approval of our application for many reasons, including:

whether the data from our clinical trials or the development program are satisfactory to the FDA or foreign regulatory agency;

disagreement with the number, design, size, conduct or implementation of our clinical trials or proposed post-marketing study, or a conclusion that the data fails to meet statistical or clinical significance or safety requirements;

acceptability of data generated at our clinical trial sites that are monitored by third-party CROs;

and deficiencies in our manufacturing processes or facilities or those of our third-party contract manufacturers and suppliers, if any.

In the event that we determine to commercialize nelitolimod outside the United States, such as in Europe, whether we can do so successfully will depend upon us receiving regulatory approval, which can be costly and time-consuming, and there is a risk that one or more regulatory bodies may require that we conduct additional clinical trials and/or take other measures which will take time and require us to incur significant additional expense.

In addition, there is the risk that we may not receive approval in one or more jurisdictions.

In addition, we obtain guidance from regulatory authorities on certain aspects of our clinical development activities and seek to comply with written guidelines provided by such authorities.

These discussions and written guidelines are not binding obligations on the part of the regulatory authorities and the regulatory authorities may require additional patient

data or studies to be conducted.

Regulatory authorities may revise or retract previous guidance during the course of a clinical trial or after the completion of the trial.

The authorities may also disqualify a clinical trial from consideration in support of approval of a potential product if they deem the guidelines have not been met.

The FDA or foreign regulatory agencies may determine our clinical trials or other data regarding safety, efficacy or consistency of manufacture or compliance with GMP regulations are insufficient for regulatory approval.

Failure to maintain or obtain regulatory approvals would materially and adversely impact us and our business prospects.

Even if we obtain regulatory approval for our product candidates, the products may not gain market acceptance among physicians, patients, hospitals, cancer treatment centers and others in the medical community, which could materially adversely impact our business, results of operations and financial condition.

18 unchanged sentences

Even if nelitolimod achieves market acceptance, it may not be able to maintain that market acceptance over time if new products or technologies are introduced that are more favorably received than nelitolimod, are more cost-effective or render nelitolimod obsolete.

In addition, although nelitolimod differs in certain ways from other approaches, serious adverse events or deaths in other clinical trials involving precision medicines, even if not ultimately attributable to our product candidates, could result in increased government regulation, unfavorable public perception and publicity, potential regulatory delays in the testing or licensing of our product candidates, stricter labeling requirements for those product candidates that are licensed, and a decrease in demand for any such product candidates.

or licensing of our product candidates, stricter labeling requirements for those product candidates that are licensed, and a decrease in demand for any such product candidates.

If our products do not gain market acceptance among physicians, patients, hospitals, cancer treatment centers and others in the medical community, this could materially adversely impact our business, results of operations and financial condition.

30 unchanged sentences

Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries.

Our competitors, either alone or with collaborative partners, may succeed in developing, acquiring or licensing on an exclusive basis drug or biologic products that are more effective, safer,

more easily commercialized or less costly than nelitolimod or may develop proprietary technologies or secure patent protection that we may need for the development of our drug delivery technologies and products or product candidates.

The availability and price, and in the case of nelitolimod, if approved, its FDA-approved labeling versus that of competitors of our competitors’ products could limit the demand and the price we are able to charge for TriNav and nelitolimod, if approved.

Our competitors, either alone or with collaborative partners, may succeed in developing, acquiring or licensing on an exclusive basis drug or biologic products that are more effective, safer, more easily commercialized or less costly than nelitolimod or may develop proprietary technologies or secure patent protection that we may need for the development of our drug delivery technologies and products or product candidates.

The availability and price, and in the case of nelitolimod, if approved, its FDA-approved labeling versus that of our competitors’ products could limit the demand and the price we are able to charge for TriNav and nelitolimod, if approved.

We may not be able to implement our business plan if the acceptance of TriNav or nelitolimod is inhibited by price competition or the reluctance of physicians to switch from existing methods of treatment, or if physicians switch to other new drug or biologic products or drug delivery systems or choose to reserve TriNav and/or nelitolimod for use in limited circumstances.

18 unchanged sentences

In any particular market, the hospitals that purchase TriNav for use by these providers could demand higher payments or take other actions that could result in higher costs or difficulty meeting regulatory or accreditation requirements.

Our ability to develop and maintain satisfactory relationships with these providers also may be negatively impacted by other factors not associated with us, such as changes in Medicare and/or Medicaid reimbursement levels and other pressures on healthcare providers and consolidation activity among hospitals, physician groups and healthcare providers.

The failure to maintain or to secure new contracts with the hospitals may result in a loss of or inability to grow our customer base, higher costs and/or healthcare provider community disruptions, any of which could harm our business.

1 unchanged sentence

We generally do not have long-term contractual commitments with our customers.

Our TriNav customers can terminate many of our consignment agreements with or without cause, in some cases subject only to 30 days’ prior notice

in the case of termination without cause.

Our TriNav customers can terminate many of our consignment agreements with or without cause, in some cases subject only to 30 days’ prior notice in the case of termination without cause.

Although a substantial majority of our revenue is typically generated from existing customers, our engagements with our customers are typically for orders that are singular in nature.

6 unchanged sentences

The success of our future operating activities will depend upon our ability to expand our support system to meet the demands of our growing business.

We expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of sales and marketing, research, drug development and regulatory affairs.

We expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the area of sales and marketing.

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

8 unchanged sentences

We depend on our senior management team and the loss of one or more key employees or an inability to attract and retain highly skilled employees could adversely affect our business.

Our future performance depends to a large extent on the continued services of members of our current management including, in particular, our Chief Executive Officer, Chief Medical Officer and Chief Financial Officer.

Our future performance depends to a large extent on the continued services of members of our current management including, in particular, our Chief Executive Officer and Chief Financial Officer.

If any of these key executive officers were to leave us, we would be forced to expend significant time and money in the pursuit of a replacement, which would result in both a delay in the implementation of our business plan and the diversion of limited working capital.

4 unchanged sentences

If we cannot attract and retain such personnel, we will be unable to develop our product candidates and achieve regulatory clearance for them, which would have a material adverse effect on our business, financial condition, and results of operations.

As of March 5, 2024, we had approximately 112 full-time employees, ten of whom hold advanced degrees.

As of December 31, 2024 , we had approximately 110 full-time employees, six of whom hold advanced degrees.

We expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the area of sales and marketing.

Competition for skilled personnel in our industry is intense and may limit our ability to hire and retain highly qualified personnel on acceptable terms, in a timely manner or at all.

In particular, we have experienced a very competitive hiring environment.

Many of the other biotechnology and medical device companies that we compete against for qualified personnel have greater financial and other resources, different risk profiles and a longer history in the industry than we do.

industry than we do.

They also may provide more diverse opportunities and better chances for career advancement.

1 unchanged sentence

To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided equity incentive awards that vest over time.

The value to employees of stock options or other equity awards that vest over time may be significantly affected by movements in our stock price that are

beyond our control and may at any time be insufficient to counteract more lucrative offers from other companies.

The value to employees of stock options or other equity awards that vest over time may be significantly affected by movements in our stock price that are beyond our control and may at any time be insufficient to counteract more lucrative offers from other companies.

Despite our efforts to retain valuable employees, members of our management, scientific and development teams are at-will employees and may terminate their employment with us on short notice.

29 unchanged sentences

As the healthcare provider systems consolidate, competition among suppliers to healthcare provider systems will become more intense.

Healthcare provider systems may try to use their market power to negotiate

price concessions or reductions for our products.

Healthcare provider systems may try to use their market power to negotiate price concessions or reductions for our products.

If we reduce our prices because of consolidation in the healthcare industry, our revenue will decrease and our results of operations and financial condition will suffer.

71 unchanged sentences

We may rely on third-parties and third-party technologies to operate critical business systems to process sensitive data in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email, and other functions.

We may also rely on third-parties to provide other products, services, parts, or otherwise to operate our business, including clinical trial sites and investigators, contractors, manufacturers, suppliers, and consultants.

Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security

measures in place.

We also rely on third-parties to provide other products, services, parts, or otherwise to operate our business, including clinical trial sites and investigators, contractors, manufacturers, suppliers, and consultants.

Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.

If the third-parties upon which we rely experience a security incident or other interruption, we could experience adverse consequences.

3 unchanged sentences

We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties upon which we rely ).

We may not, however, detect and remediate all such vulnerabilities on a timely basis.

We have not and may not in the future, however, detect and remediate all such vulnerabilities on a timely basis.

Further, we may experience delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities, which could be exploited and resulted in a security incident.

2 unchanged sentences

We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents.

Additionally, certain data privacy and security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data.

Additionally, certain data privacy and security obligations have required us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data.

Additionally, applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents or to implement other requirements, such as providing credit monitoring.

22 unchanged sentences

Competitors can be affected differently by weather conditions and natural disasters depending on the location of their suppliers and operations.

Failure to take adequate steps to reduce the likelihood or mitigate the potential impact of such events, or to effectively manage such events if they occur, particularly when materials are sourced from a single location or supplier or produced by a single manufacturer, could adversely affect our business, financial condition,

results of operations and/or require additional resources to restore our supply chain or manufacturing capabilities, as applicable.