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Item 1A. Risk Factors

2025-06-17 compared with 2024-06-11 · 324 added, 339 removed, 1146 unchanged (37% of the section changed)

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The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may have a material adverse effect on our business, reputation, revenue, financial condition, results of operations and future prospects, in which event the market price of our common stock could decline, and you could lose part or all of your investment.

Unless otherwise indicated, reference in this section and elsewhere in this Annual Report to our business being adversely affected, negatively impacted or harmed will include an adverse effect on, or a negative impact or harm to, the business, reputation, financial condition, results of operations, revenue and our future prospects.

The material and other risks and uncertainties summarized elsewhere in this Annual Report and described below are not intended to be exhaustive and are not the only ones we face.

Unless otherwise indicated, reference in this section and elsewhere in this Report to our business being adversely affected, negatively impacted or harmed will include an adverse effect on, or a negative impact or harm to, the business, reputation, financial condition, results of operations, revenue and our future prospects.

The material and other risks and uncertainties summarized elsewhere in this Report and described below are not intended to be exhaustive and are not the only ones we face.

Additional risks and uncertainties not presently known to us, or that we currently deem immaterial, may also impair our business operations.

This Annual Report also contains forward-looking statements that involve risks and uncertainties.

This Report also contains forward-looking statements that involve risks and uncertainties.

Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors, including the risks described below.

See the section titled “Forward-Looking Statements.”

• the successful completion of clinical or nonclinical studies in any of our development programs may not be sufficient to cause the FDA to approve any NDA that we may submit, or cause any other agency to provide regulatory approval of any of our product candidates, and, even if approved, does not ensure acceptance of such product candidates by clinicians leading to a revenue stream to support our operations;

See the section titled “Cautionary Note Regarding Forward-Looking Statements.”

• failures of ongoing or future nonclinical or clinical trials of our product candidates, or material delays in the completion and/or commencement of our ongoing or planned nonclinical or clinical trials, could result in increased costs to us and could delay, prevent or limit our ability to generate revenue and continue our business;

• we have incurred significant net losses since inception, and we will continue to incur substantial operating losses for the foreseeable future;

• we are a clinical-stage biopharmaceutical company with no revenues from product sales or approved products, and limited experience developing new drug candidates, which makes it difficult to assess our future viability;

• we require additional financing to execute our long-term business plan, including further development and potential commercialization of our product candidates;

• raising additional capital in equity-based financing transactions is likely to cause substantial dilution to our existing stockholders, may restrict our operations or require us to relinquish rights, and may require us to seek stockholder approval to authorize additional shares of our common stock;

• failures of future clinical studies of our product candidates, or delays in the commencement or completion of our ongoing or planned clinical trials, could result in increased costs to us and could delay, prevent or limit our ability to generate revenue and continue our business;

• we are a clinical-stage biopharmaceutical company with no approved products or revenues from product sales, and limited experience developing and commercializing new product candidates, which makes it difficult to assess our future viability;

• we depend heavily on the success of our product candidates, and we cannot be certain that we will be able to obtain regulatory approval for, or successfully commercialize, any of our current or future product candidates;

• we are focused on neuroscience drug development, a field that has seen very limited success.

The ability to successfully develop product candidates in this field is extremely difficult and is subject to a number of unique challenges;

• the successful completion of nonclinical studies and/or clinical trials in any of our product candidate development programs may not be sufficient to cause the FDA to approve any NDA that we may submit, or cause any other agency to provide regulatory approval of any of our product candidates, and, even if approved, does not ensure acceptance of such product candidates by clinicians leading to a revenue stream to support our operations;

• we have experienced rapid growth since early 2021.

If we fail to effectively manage our growth, we may not be able to execute on our business objectives;

• we rely on third party collaborators to assist in conducting our nonclinical studies and clinical trials and if they do not perform satisfactorily, we may not be able to obtain regulatory approval or commercialize our product candidates, or such approval or commercialization may be delayed, and our business could be substantially harmed;

• we require substantial additional financing to execute our business plan, including further nonclinical and clinical development, contract manufacturing and potential commercialization of our product candidates;

• raising additional capital in equity-based financing transactions will cause substantial dilution to our existing stockholders, may restrict our operations or require us to relinquish rights to our product candidates, and may require us to seek stockholder approval to authorize additional shares of our common stock;

• if we are unable to retain or attract key management and scientific personnel, we may be unable to successfully produce, develop, and commercialize our product candidates;

• we operate in highly competitive and rapidly changing industries, which may result in others discovering, developing or commercializing competing products before or more successfully than we do;

• nonclinical and clinical drug development is a lengthy and expensive process, with an uncertain outcome.

Our nonclinical and clinical programs have experienced delays and may experience additional delays or may never advance, which would adversely affect our ability to obtain regulatory approvals or commercialize our product candidates on a timely basis or at all, which could have an adverse effect on our business;

• we face significant competition, and if we are unable to compete effectively, we may not be able to achieve or maintain significant market penetration or improve our results of operations;

• if we are unable to adequately protect our proprietary technology, or obtain and maintain issued patents that are sufficient to protect our product candidates, others could compete against us more directly, which would have a material adverse impact on our business, results of operations, financial condition and prospects;

• other risks and uncertainties, including those described under Risk Factors below.

If we are unable to effectively manage the impact of these and other risks, our ability to operate and execute our business plan would be substantially impaired.

• we face significant competition, and if we are unable to compete effectively, we may not be able to achieve or maintain significant market penetration or improve our results of operations;

• if we are unable to adequately protect our proprietary technology and product candidates, or obtain and maintain issued patents that are sufficient to protect our product candidates, others could compete against us more directly, which would have a material adverse impact on our business, results of operations, financial condition and prospects;

• Reduction in staffing, large staff turnover and/or inadequate funding for the FDA or other government agencies could hinder those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business;

• other risks and uncertainties, including those described below.

If we are unable to effectively manage the impact of these and other risks, our ability to operate and execute our strategic business plan would be substantially impaired.

In turn, the value of our securities would be materially reduced.

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Product candidates that appear promising in the early phases of development may fail to reach the market for several reasons, including:

• delays or difficulties in enrollment and completion of any of our clinical trials;

• clinical trial results may show the product candidates to be less effective than expected (for example, a clinical trial could fail to meet its primary or key secondary endpoint(s)) or have an unacceptable safety or tolerability profile;

• failure to receive the necessary regulatory approvals or a delay in receiving such approvals, which, among other things, may be caused by patients who fail the trial screening process, slow enrollment in clinical trials, patients dropping out of trials, patients lost to follow-up, length of time to achieve trial endpoints, additional time requirements for data analysis, review of IND, NDA or similar foreign applications, preparation, discussions with the FDA or foreign regulatory authorities, an FDA or foreign regulatory authority request for additional preclinical or clinical data (such as long-term toxicology studies) or unexpected safety or manufacturing issues;

• the FDA or other equivalent non-U.S.

regulatory authorities may find the chemistry, manufacturing and controls, or (CMC) data insufficient to support the quality of our product candidates;

• preclinical study results may show the product candidate to be less effective than desired or to have harmful side effects;

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If any of our product candidates encounters safety or efficacy problems, development delays or regulatory issues or other problems, our development plans and business would be materially harmed.

We may not have the financial resources to continue development of our product candidates if we experience any issues that delay or prevent regulatory approval of, or our ability to commercialize, our product candidates, including:

We may not have the financial resources to continue development of or commercialize our product candidates if we experience any issues that further delay or prevent regulatory approval of, or our ability to commercialize, our product candidates, including:

• our inability to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our product candidates are safe and effective;

• insufficiency of our financial and other resources to complete the necessary preclinical studies, clinical trials and regulatory submissions;

• insufficiency of our financial and other resources to complete the necessary preclinical studies, clinical trials and regulatory submissions or necessary to fund pre-commercial and commercial activities to establish sales, marketing and distribution capabilities needed to successfully commercialize an approved product;

• negative or inconclusive results from our preclinical studies, clinical trials or the clinical trials of others for product candidates similar to ours, leading to a decision or requirement to conduct additional preclinical studies, clinical trials or abandon a program;

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Net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital.

Our net losses totaled $29.4 million and $59.2 million for the years ended Ma rch 31, 2024 and 2023, respectively.

Our net losses totaled $51.4 million and $29.4 million for the years ended March 31, 2025 and 2024, respectively.

We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase as we continue our research and development of, and seek regulatory approvals for, and commercialization of our product candidates.

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• experience an increase in headcount as we expand our research and development organization and market development and pre-commercial planning activities;

• undertake any pre-commercial or commercial activities to establish sales, marketing and distribution capabilities;

• undertake any pre-commercial and commercial activities to establish sales, marketing and distribution capabilities;

• advance our preclinical-stage product candidates into clinical development;

• maintain, expand and protect our intellectual property portfolio.

Biopharmaceutical product development entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval, secure market access and reimbursement, and become commercially viable, and therefore any investment in us is highly speculative.

approval, secure market access and reimbursement, and become commercially viable, and therefore any investment in us is highly speculative.

Accordingly, before making an investment in us, you should consider our prospects, factoring in the costs, uncertainties, delays and difficulties frequently encountered by companies in clinical development, especially clinical-stage biopharmaceutical companies such as ours.

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If we continue to incur losses as we have since our inception, investors may not receive any return on their investment and may lose their entire investment.

We will need substantial additional financing to execute our long-term business plan, and if we are unable to raise capital when needed, we could be forced to delay, reduce or terminate our research and development programs or pre-commercialization efforts.

We will need substantial additional financing to execute our business plan, and if we are unable to raise capital when needed, we could be forced to delay, reduce or terminate our research and development programs, pre-commercialization or commercialization efforts.

Our operations have consumed substantial amounts of cash since inception.

As in prior periods we expect to continue to spend substantial amounts of cash to continue the preclinical and clinical development of our product candidates.

These expenditures will include costs associated with general and administrative costs, facilities costs, research and development,

manufacturing, conducting nonclinical experiments and clinical trials, obtaining regulatory approvals and commercialization, should the FDA approve any of our product candidates for sale.

These expenditures will include costs associated with general and administrative costs, facilities costs, research and development, manufacturing, conducting nonclinical experiments and clinical trials, obtaining regulatory approvals and commercialization, should the FDA approve any of our product candidates for sale.

We will need to raise substantial additional capital to complete certain of our currently planned preclinical and clinical development programs, including future late-stage clinical trials.

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• subject to receipt of regulatory approval, revenue, if any, received from commercial sales of our product candidates or any other additional product candidates we may develop and pursue in the future;

• the cost of manufacturing and formulating our product candidates;

• the extent to which we establish and maintain strategic partnerships, licensing or other collaborative arrangements for the development of our product candidates, on favorable financial terms, if at all;

• the cost of formulating and manufacturing our product candidates;

• the extent to which we establish and maintain strategic partnerships, licensing or other collaborative arrangements necessary for the development and commercialization of our product candidates, on favorable financial terms, if at all;

• subject to regulatory approval, market acceptance of our product candidates;

• the effect of competing technological and market developments;

• our headcount growth and associated costs as we expand our research and development and market development and pre-commercial planning activities;

• our headcount growth and associated costs as we expand our research and development, market development, pre-commercial and commercial activities;

• the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights, including enforcing and defending intellectual property related claims;

• the costs of operating as a public company.

We believe that our available financial resources will enable us to fund our operating expense requirements through at least 12 months from the issuance date of our audited consolidated financial statements included elsewhere in this Annual Report.

However, our estimate may prove to be wrong, and we could use our available capital resources sooner than we currently expect.

Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

As of March 31, 2025 and 2024, the Company had cash, cash equivalents, and marketable securities of $80.5 million and $119.2 million.

As of June 17, 2025 , the issuance date of the consolidated financial statements as of and for the year ended March 31, 2025, there is uncertainty about whether the Company’s combined cash, cash equivalents, and marketable securities will be sufficient to fund operations beyond twelve months from the issuance date of these consolidated financial statements and therefore the Company concluded that substantial doubt existed about the Company’s ability to continue as a going concern.

The terms of any future financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our shares to decline.

For example, the sale of additional equity securities and the conversion, exchange or exercise of certain of our outstanding securities will dilute all of our stockholders.

The incurrence of debt could result in increased fixed payment obligations, and we could be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating

restrictions that could adversely impact our ability to conduct our business.

We may also seek funds through arrangements with collaborative partners in certain territories, including the U.S., or at an earlier stage than otherwise would be desirable or aligned with our business plan, and we may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.

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Moreover, we may fail to expend our limited resources on product candidates or indications that may have been more profitable or for which there is a greater likelihood of success.

Currently, we are developing or have development plans in place for six clinical-stage product candidates.

We seek to maintain a process of prioritization and resource allocation to maintain an optimal balance between aggressively pursuing our most advanced product candidates and indications and ensuring the development of additional potential product candidates and indications, on our own or with strategic collaborators.

Currently, we are developing or have development plans in place for the five clinical-stage pherine product candidates currently in our neuroscience pipeline.

We seek to maintain a process of prioritization and optimal capital allocation to maintain an appropriate balance between the development of our most advanced product candidates and indications and

ensuring the development of additional potential product candidates and indications, on our own or with strategic collaborators.

Due to the significant resources required for the development of our product candidates, we must decide which product candidates and indications to pursue and advance and the amount of resources to allocate to each.

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As a result, we may fail to capitalize on viable commercial products or profitable market opportunities, be required to forego or delay pursuit of opportunities with other product candidates or other disorders that may later prove to have greater commercial potential than those we choose to pursue, or relinquish valuable rights to such product candidates through collaboration, licensing or royalty arrangements in cases in which it would have been advantageous for us to invest additional resources to retain sole development and commercialization rights.

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

Raising additional capital may cause substantial dilution to our stockholders, restrict our operations or require us to relinquish significant rights to our technologies or product candidates.

We expect our expenses to increase in connection with our planned operations.

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In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans.

To the extent that we raise additional capital through the sale of common stock, convertible securities or other equity securities, the ownership interest of our stockholders may be diluted, and the terms of these securities could include liquidation or other preferences and anti-dilution protections that could adversely affect the rights of our common stockholders.

In addition, royalty-based financing or debt financing, if available, may result in our relinquishing rights to valuable future revenue streams or fixed payment obligations and may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, creating liens, redeeming stock or declaring dividends, that could adversely impact our ability to conduct our business.

In addition, securing financing could require a substantial amount of time and attention from our management team and may divert a disproportionate amount of our attention away from day-to-day activities, which may adversely affect our management team’s ability to oversee the development of our product candidates.

To the extent that we raise additional capital through the sale of common stock, convertible securities or other equity securities, the ownership interest of our stockholders may be substantially diluted, and the terms of these securities could include liquidation or other preferences and anti-dilution protections that could adversely affect the rights of our common stockholders.

In addition, royalty-based financing or debt financing, if available, may result in our relinquishing significant rights to valuable future revenue streams or fixed payment obligations and may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, creating liens, redeeming stock or declaring dividends, that could adversely impact our ability to conduct our business.

If we raise additional capital through collaborations, strategic alliances or marketing, distribution or licensing arrangements, or royalty-based financings with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us.

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Risks Related to Product Development, Regulatory Approval

The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.

The regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.

We are not permitted to commercialize, market, promote or sell any product candidate in the U.S.

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In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development.

To date, we have not submitted an NDA to the FDA or similar drug approval submissions to comparable foreign regulatory authorities for any product candidate.

We must complete additional preclinical studies and clinical trials to demonstrate the safety and efficacy of our product candidates in humans before we will be able to seek or obtain these approvals.

Clinical testing is expensive, difficult to design and implement, can take many years to complete and is inherently uncertain as to outcome.

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

The clinical development of our initial and potential additional product candidates is susceptible to the risk of failure inherent at any stage of development, including failure to demonstrate efficacy in a clinical trial or across a broad population of patients, the occurrence of adverse events that are severe or medically or commercially unacceptable, failure to comply with protocols or applicable regulatory requirements and determination by the FDA or any comparable foreign regulatory authority that a product candidate may not continue development or is not approvable.

It is possible that even if any of our product candidates have a beneficial effect, that effect will not be detected during clinical evaluation as a result of one or more of a variety of factors, including the size, duration, design, measurements, conduct or analysis of our clinical trials.

To date, we have not submitted a NDA to the FDA or similar drug approval submissions to comparable foreign regulatory authorities for any product candidate.

We must complete additional preclinical studies

and clinical trials to demonstrate the safety and efficacy of our product candidates in humans before we will be able to seek or obtain these approvals.

Nonclinical studies and clinical trials are expensive, difficult to design and implement, can take many years to complete and are inherently uncertain as to outcome.

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

The clinical development of our product candidates is susceptible to the risk of failure inherent at any stage of development, including failure to demonstrate efficacy in a clinical trial or across a broad population of patients, the occurrence of adverse events that are severe or medically or commercially unacceptable, failure to comply with protocols or applicable regulatory requirements and determination by the FDA or any comparable foreign regulatory authority that a product candidate may not continue development or is not approvable.

It is possible that even if any of our product candidates have a beneficial effect, that effect will not be detected throughout the required phase of clinical evaluation as a result of one or more of a variety of factors, including the size, duration, design, measurements, conduct or analysis of our clinical trials.

Conversely, as a result of the same factors, our clinical trials may indicate an apparent positive effect of such product candidate that is greater than the actual positive effect, if any.

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Serious adverse events or other adverse events, as well as tolerability issues, could hinder or prevent market acceptance of the product candidate at issue.

This lengthy approval process, as well as the unpredictability of clinical trial results, may result in our failing to obtain regulatory approval to market any product candidate we develop, which would substantially harm our business, results of operations and prospects.

This lengthy approval process, as well as the unpredictability of nonclinical studies and clinical trial results, may result in our failing to obtain regulatory approval to market any product candidate we develop, which would substantially harm our business, results of operations and prospects.

The FDA and other comparable foreign authorities have substantial discretion in the approval process and determining when or whether regulatory approval will be granted for any product candidate that we develop.

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In order to obtain FDA approval of our product candidates, we must, among other things, demonstrate substantial evidence of the effectiveness of such product candidates.

FDA has generally considered this demonstration to require data gathered from two or more adequate and well-controlled clinical trials of the product candidate in the relevant patient population, or in some cases, one adequate and well-controlled trial plus other confirmatory evidence.

FDA has generally considered this demonstration of substantial evidence of the effectiveness to require data gathered from at least two adequate and well-controlled clinical trials of the product candidate in the relevant patient population, or in some cases, one adequate and well-controlled trial plus other confirmatory evidence.

Adequate and well-controlled clinical trials typically involve a large number of patients, have significant costs and take years to complete.

The FDA or other regulatory authorities may disagree with us about whether a clinical trial is adequate and well-controlled or may request that we conduct additional clinical trials prior to granting any regulatory approval.

The FDA or other regulatory authorities may disagree with us about whether a clinical trial is adequate and well-controlled or may request that we conduct additional nonclinical studies or clinical trials prior to granting any regulatory approval.

In addition, there is no assurance that the doses, endpoints and trial designs that we intend to use for our ongoing and/or future clinical trials, including trials developed based on feedback from the FDA or other regulatory agencies or those that have been used for the approval of similar drugs, will be acceptable for future approvals.

For example, while we have designed our registration-directed Phase 3 program for fasedienol after receiving input and feedback from the FDA, there can be no assurance that the design of our

planned clinical trials will be satisfactory to the FDA or that the FDA will not require us to modify our trials or conduct additional testing, or that completing these trials will result in regulatory approval.

For example, while we have designed our U.S.

registration-directed PALISADE program for fasedienol for the acute treatment of SAD after receiving input and feedback from the FDA, there can be no assurance that the design of our planned clinical trials will be satisfactory to the FDA or that the FDA will not require us to modify our trials or conduct additional clinical trials, or that completing these trials will result in regulatory approval.

Even if our ongoing and/or future clinical trials achieve their primary efficacy endpoint, there can be no assurance that the FDA will find them sufficient to support approval.

Moreover, there are limited precedents for trial design, trial endpoints and regulatory pathway for certain therapeutic indications we are pursuing through the development of our product candidates, which may make clinical development and regulatory approval for those product candidates more challenging.

Moreover, there are limited precedents for trial design, trial endpoints and regulatory pathway for the acute treatment of SAD and certain other therapeutic indications we are pursuing through the development of our product candidates, including fasedienol for the acute treatment of SAD, itruvone for the treatment of MDD and PH80 for the management of VMS (hot flashes) associated with menopause, which may make clinical development and regulatory approval for those product candidates more challenging.

Our clinical trial results may not support approval of our product candidates.

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• the FDA or comparable foreign regulatory authorities may not file or accept our NDA or marketing application for substantive review;

• the FDA or other equivalent non-U.S.

regulatory authorities may find the chemistry, manufacturing and controls, or data insufficient to support the quality of our product candidates;

• the FDA or comparable foreign regulatory authorities may disagree with the dosing regimen, design or implementation of our clinical trials;

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We are dependent on third parties having accurately generated, collected, interpreted and reported data from certain preclinical studies and clinical trials that were previously conducted for our product candidates.

We have acquired substantially all of our current product candidates from Pherin as a result of the Pherin Acquisition, for which Pherin undertook research and development prior to our acquisition or license.

We had no involvement with or control over the preclinical and clinical development of our product candidates prior to acquiring or licensing them from Pherin.

We have acquired our pherine product candidates from Pherin, now our wholly-owned subsidiary, and Pherin undertook research and development of such product candidates prior to our acquisitions.

We had no involvement with or control over the preclinical and clinical development of our pherine product candidates prior to acquiring or licensing them from Pherin.

Therefore, we are dependent, in part, on Pherin’s prior research and development efforts in accordance with the applicable protocols, legal and regulatory requirements, and scientific standards utilized by them;

having accurately reported the results of all preclinical studies and clinical trials conducted with respect to such product candidates and having correctly collected and interpreted the data from these studies and trials.

These risks also apply to any additional product candidates that we may acquire or in-license in the future.

If these activities were not compliant, accurate or correct, the clinical development, regulatory approval or commercialization of our product candidates will be adversely affected.

These risks also apply to any product candidates that we may acquire or in-license in the future, if any.

If these activities were not compliant, accurate or correct, the clinical development, regulatory approval or commercialization of our pherine product candidates will be adversely affected.

If our clinical trials fail to replicate results from earlier preclinical studies or clinical trials conducted by us or third parties, we may be unable to successfully develop, obtain regulatory approval for or commercialize our product candidates.

The results observed from preclinical studies or early-stage clinical trials of our product candidates may not necessarily be predictive of the results of later-stage clinical trials that we conduct.

Similarly, positive results from such preclinical studies

or clinical trials may not be replicated in our subsequent preclinical studies or clinical trials.

The results observed from earlier preclinical studies or early-stage clinical trials of our product candidates, including positive results, may not necessarily be predictive of the results of ongoing or future clinical trials.

Furthermore, our product candidates may not be able to demonstrate similar activity or adverse event profiles as other product candidates that we believe may have similar profiles.

In addition, in our planned future clinical trials, we may utilize clinical trial designs or dosing regimens that have not been tested in prior clinical trials.

There can be no assurance that any of our clinical trials will ultimately be successful or support further clinical development of any of our product candidates, such as the failure of our PALISADE-1 Phase 3 clinical trial of fasedienol to meet its primary endpoint .

There is a high failure rate for drugs proceeding through clinical trials.

Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage development, and we cannot be certain that we will not face similar setbacks.

These setbacks have been caused by, among other things, preclinical findings made while clinical trials were underway or safety or efficacy observations made in preclinical studies and clinical trials, including previously unreported adverse events.

We may incur unexpected costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.

To obtain the requisite regulatory approvals to commercialize any of our product candidates, we must demonstrate through extensive preclinical studies and clinical trials that our product candidates are safe and effective in humans.

We may experience delays in completing our clinical trials or preclinical studies and initiating or completing additional clinical trials or preclinical studies, including as a result of regulators not allowing or delay in allowing clinical trials to proceed under an IND, or not approving or delaying approval for any clinical trial grant or similar approval we need to initiate a clinical trial.

Moreover, there is a high failure rate for drugs candidate proceeding through clinical trials and there can be no assurance that any of our clinical trials will ultimately be successful.

We, and many other companies in the pharmaceutical and biotechnology industries, have suffered significant setbacks in late-stage clinical trials after achieving positive results in earlier-stage development, such as the failure of our PALISADE-1 Phase 3 clinical trial of fasedienol to meet its primary endpoint, and we cannot be certain that we will not face similar setbacks in the future.

In addition to the risk of ongoing or

planned clinical trials failing to meet primary endpoints, setbacks may also be caused by, among other things, preclinical findings made while clinical trials were underway or safety or efficacy observations made in preclinical studies and clinical trials, including previously unreported adverse events.

Such failures or setback may have a material adverse effect on our ability to develop, obtain regulatory approval for or ultimately commercialize any of our product candidates.

We may incur unexpected costs or experience material delays in completing, or ultimately be unable to complete, the contract manufacturing, nonclinical and clinical development and commercialization of our product candidates.

To obtain the requisite regulatory approvals to commercialize any of our product candidates, we must demonstrate through extensive nonclinical studies and clinical trials that our product candidates are safe and effective in humans.

We have experienced, and may further experience delays in completing our contract manufacturing, clinical trials or nonclinical studies and initiating or completing additional clinical trials or nonclinical studies, including as a result of regulators not allowing or delay in allowing clinical trials to proceed under an IND or similar approval we need to initiate a clinical trial.

We may also experience numerous unforeseen events during our clinical trials that could delay or prevent our ability to receive marketing approval or commercialize the product candidates we develop, including:

• regulators, IRBs, or other reviewing bodies such as ethics committees may not authorize us or our investigators to commence a clinical trial, or to conduct or continue a clinical trial at a prospective or specific trial site;

• we may not reach agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

• we may experience challenges or delays in recruiting principal investigators or study sites to lead our clinical trials;

• the number of subjects or patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be insufficient or slower than we anticipate, and the number of clinical trials being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical trials at a higher rate than we anticipate;

• our third-party contractors, including CMOs, CROs or other third-parties acting on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

• we may have to amend clinical trial protocols submitted to regulatory authorities or conduct additional studies to reflect changes in regulatory requirements or guidance, which may be required to resubmit to an IRB and regulatory authorities for re-examination;

• we may not reach agreement on acceptable terms with prospective contract research organizations (CROs) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

• we may experience further challenges or delays in recruiting principal investigators or study sites to lead our clinical trials;

• the number of subjects or patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be insufficient or materially slower than we anticipate, and the number of clinical trials being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical trials at a higher rate than we anticipate;

• our third-party contractors, including contract development and manufacturing organizations (CDMOs), CROs, clinical research sites or other third-parties acting on our behalf or in connection with our studies, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

• regulators or other reviewing bodies may find deficiencies with, fail to approve or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers with which we enter into agreements for clinical and commercial supplies, or the supply or quality of any product candidate or other materials necessary to conduct clinical trials of our product candidates may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply;

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Regulators or IRBs of the institutions in which clinical trials are being conducted may suspend, limit or terminate a clinical trial, or data monitoring committees may recommend that we suspend or terminate a clinical trial, due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

Negative or inconclusive results from our clinical trials or preclinical studies could mandate repeated or additional clinical trials and, to

the extent we choose to conduct clinical trials in other indications, could result in changes to or delays in clinical trials of our product candidates in such other indications.

Negative or inconclusive results from our clinical trials or preclinical studies could mandate repeated or additional clinical trials and, to the extent we choose to conduct clinical trials in other indications, could result in changes to or delays in clinical trials of our product candidates in such other indications.

We do not know whether any clinical trials that we conduct will demonstrate efficacy and safety results adequate to obtain regulatory approval to market our product candidates for the indications that we are pursuing.

If later-stage clinical trials do not produce favorable results, our ability to obtain regulatory approval for our product candidates will be adversely impacted.

Our failure to successfully initiate and complete clinical trials and to demonstrate the efficacy and safety necessary to obtain regulatory approval to market our product candidates would significantly harm our business.

Our product candidate development costs will also increase if we experience delays in testing or regulatory approvals and we may be required to obtain additional funds to complete clinical trials.

We cannot assure you that our clinical trials will begin as planned or be completed on schedule, if at all, or that we will not need to restructure or otherwise modify our trials after they have begun.

If later-stage clinical trials do not produce favorable results, our ability to obtain regulatory approval for and commercialize our product candidates will be adversely impacted.

Our failure to successfully initiate and complete required nonclinical studies and clinical trials and to demonstrate the efficacy and safety necessary to obtain regulatory approval to market our product candidates would significantly harm our business.

Our product candidate development costs will also increase substantially if we experience delays in testing or regulatory approvals and we may be required to obtain additional funds to complete necessary nonclinical studies or clinical trials.

We cannot assure you that our nonclinical studies or clinical trials will begin as planned or be completed on schedule, if at all, or that we will not need to restructure or otherwise modify our trials after they have begun.

Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates, which may harm our business and results of operations.

In addition, many of the factors that cause, or lead to, delays of clinical trials may ultimately lead to the denial of regulatory approval of our product candidates.

Business interruptions resulting from the COVID-19 pandemic, the post-COVID environment and other public health crises could disrupt the development of our product candidates and adversely impact our business.

Public health crises such as pandemics or similar outbreaks could adversely impact our business.

For instance, the COVID-19 pandemic and the post-COVID environment, including supply chain, labor market and other disruptions, as well as volatility in the global financial markets, in each case, driven by the pandemic, have impacted and may further impact our clinical trials or preclinical studies.

In addition, COVID-19, the post-COVID environment or future public health crises may impact our ability to retain principal investigators and site staff for our clinical trials.

For instance, healthcare providers may have heightened exposure to COVID-19 or may be impacted due to prioritization of hospital resources toward the pandemic and restrictions on travel.

Our clinical trial sites may be located in geographies that are disproportionately affected by the COVID-19 pandemic or actions taken by governmental and health authorities to address the pandemic.

Furthermore, as a result of supply chain, labor market and other disruptions driven by the pandemic and the post-COVID environment, COVID-19 has impacted and may further negatively affect our operations or the operations of our vendors, suppliers and business partners, including the third-party CROs, clinical sites and other vendors that we rely upon to carry out our clinical trials or the operations of our third-party manufacturers and other suppliers, which could result in delays or disruptions in the supply of our product candidates.

The negative impact COVID-19 or the post-COVID environment has on patient enrollment, site staffing or treatment or the timing and execution of our clinical trials has caused and could cause further delays to our clinical trial activities, which could adversely affect our ability to obtain regulatory approval for and to commercialize our product candidates, increase our operating expenses and have a material adverse effect on our business and financial results.

COVID-19 and the post-COVID environment have also caused volatility in the global financial markets, including inflationary headwinds, which may negatively affect our ability to raise additional capital on attractive terms or at all.

The extent to which COVID-19 and the post-COVID environment impact our business, results of operations and financial condition will depend on future developments, including new variants or subvariants, which may impact rates of infection and the extent and effectiveness of actions to contain COVID-19 or treat its impact, including vaccination campaigns, COVID-19 treatments and lockdown measures, among others.

In addition, recurrences or additional waves of COVID-19 cases could cause other widespread or more severe impacts depending on where infection rates are highest.

We cannot presently predict the scope and severity of any potential business shutdowns or disruptions, but if we or any of the third parties with whom we engage were to experience prolonged business shutdowns or other disruptions, our ability to conduct our business in the manner and on the timelines presently planned could be materially and negatively affected, which could have a material adverse impact on our business, results of operations and financial condition.

If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons.

The timely completion of clinical trials in accordance with our protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the study until its conclusion.

Patient enrollment is affected by many factors, including:

• the effects of the COVID-19 pandemic and the post-COVID environment on our ability to recruit and retain patients;

In addition, many of the factors that cause, or lead to, delays of nonclinical studies or clinical trials may ultimately lead to the denial of regulatory approval of our product candidates.

Our clinical development activities could be materially delayed or otherwise adversely affected by difficulties enrolling and randomizing patients in our clinical trials.

We have, and may continue to experience difficulties in patient enrollment and randomization in our clinical trials for a variety of reasons, including the stringent entry criteria for our clinical trials.

The timely completion of clinical trials requiring rigorous adherence to clinical trial protocols depends, among other things, on our ability to enroll and randomize a sufficient number of patients who qualify for and remain in the trial until its conclusion.

Patient enrollment and randomization is affected by many factors, including:

• the patient eligibility criteria defined in the protocol;

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• the severity of the disease or condition under investigation;

• the proximity of patients to study sites;

• the proximity of patients to trial sites;

• the design of the trial;

• our ability to recruit clinical trial investigators with the appropriate competencies and experience;

• our ability to recruit, train and retain clinical trial investigators and clinical research site staff with the appropriate competencies and experience through the duration of the trial;

• competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any drugs that may be approved for the indications that we are investigating;

• patient referral practices of physicians;

• the ability to monitor patients adequately during and after treatment;

• patient recruitment or referral practices of centralized recruiting firms, clinical trial sites and physicians;

• the ability to monitor patients adequately during and after treatment in the trial;

• our ability to obtain and maintain patient consents;

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Furthermore, if significant adverse events or other side effects are observed in any of our clinical trials, we may have difficulty recruiting patients to our trials and patients may drop out of our trials.

Finally, business disruptions, including those relating to natural disasters (including as a result of climate change), geopolitical incidents or macroeconomic conditions, may disrupt our clinical trials.

Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or might require us to abandon one or more clinical trials or our development efforts altogether.

Delays in patient enrollment may result in increased costs, affect the timing or outcome of the planned clinical trials, product candidate development and approval process and jeopardize our ability to seek and obtain the regulatory approval required to commence product sales and generate revenue, which could prevent completion of these trials, adversely affect our ability to advance the development of our product candidates, cause the value of the company to decline and limit our ability to obtain additional financing if needed.

Finally, business disruptions, including those relating to natural disasters (including as a result of climate change), geopolitical incidents, pandemics or macroeconomic conditions, may disrupt our clinical trials.

Our inability to enroll and randomize a sufficient number of patients for our clinical trials would result in significant delays or might require us to abandon one or more clinical trials or our development efforts altogether.

Material delays in patient

enrollment and randomization may result in increased costs, affect the timing or outcome of ongoing or planned clinical trials and the public disclosure of trial results, product candidate development and approval process and jeopardize our ability to raise additional capital and seek and obtain the regulatory approval required to commence product sales and generate revenue, which could prevent completion of these trials, adversely affect our ability to advance the development of our product candidates, cause the value of the Company to decline and limit our ability to obtain additional financing if needed.

Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay.

As product candidates proceed through preclinical studies to late-stage clinical trials towards potential approval and commercialization, it is common that various aspects of the development program, such as the vendors used to manufacture drug product or manufacturing methods and formulation, are altered along the way in an effort to optimize processes and results.

As product candidates proceed through preclinical studies and clinical development trials towards potential approval and commercialization, it is common that various aspects of the development program, such as the vendors used to manufacture drug product or manufacturing methods and formulation, are altered along the way in an effort to optimize processes and results.

Such changes carry the risk that they will not achieve these intended objectives.

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Such changes may also require additional testing, FDA or comparable foreign regulatory authorities' notification or approval.

This could delay or prevent completion of clinical trials, require conducting bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay or prevent approval of our product candidates and jeopardize our ability to commence sales and generate revenue.

This could delay or prevent completion of clinical development, require conducting bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay or prevent approval of our product candidates and jeopardize our ability to commence sales and generate revenue.

Even if we complete the necessary preclinical studies and clinical trials, the marketing approval process is expensive, time-consuming and uncertain and may prevent us from obtaining approvals for the commercialization of our product candidates.

Any product candidate we develop and the activities associated with its development and commercialization, including its design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale, and

distribution, are subject to comprehensive regulation by the FDA and other regulatory authorities in the U.S.

Any product candidate we develop, and the activities associated with its development and commercialization, including its design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale, and distribution, are subject to comprehensive regulation by the FDA and other regulatory authorities in the U.S.

and by comparable authorities in other countries.

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We have not received approval to market any product candidates from regulatory authorities in any jurisdiction and it is possible that none of the product candidates we are developing or may seek to develop in the future will ever obtain regulatory approval.

We have no experience in submitting and supporting the applications necessary to gain marketing approvals and expect to rely on third-party CROs or regulatory consultants to assist us in this process.

We have no experience in submitting and supporting the applications necessary to gain marketing approvals and expect to rely on third-party CROs and regulatory consultants to augment our internal personnel and assist us in this process.

Securing regulatory approval requires the submission of extensive preclinical and clinical data and supporting information to the various regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy.

Securing regulatory approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the relevant regulatory authority.

Securing regulatory approval also requires the submission of extensive information about the product manufacturing process to, and inspection of manufacturing facilities by, the relevant regulatory authority.

Any product candidates we develop may not be effective, may be only moderately effective, or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude its obtaining marketing approval or prevent or limit commercial use.

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and abroad, is expensive, may take many years if additional clinical trials are required, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity, and novelty of the product candidates involved.

Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application.

Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory personnel and review processes for each submitted product application, may cause delays in the approval or rejection of an application.

The FDA and comparable authorities in other countries have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other studies.

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If we experience delays in obtaining approval or if we fail to obtain approval of any product candidates we may develop, the commercial prospects for those product candidates may be harmed, and our ability to generate revenues will be materially impaired.

Interim, topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data becomes available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publish or publicly disclose interim, topline or preliminary data from our clinical trials.

Interim, topline and preliminary data from our nonclinical studies or clinical trials that we may announce or publish from time to time may change as more patient data becomes available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publish or publicly disclose interim, topline or preliminary data from our nonclinical studies or clinical trials.

These publications or disclosures are based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial.

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Further, disclosure of such data by us or by our competitors could result in volatility in the price of our common stock.

In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product candidate or our business.

In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, if we publicly disclose certain information, you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, strategies, views, activities or otherwise regarding a particular product candidate or our business.

If we do not achieve our projected development and commercialization goals in the timeframes we announce and expect, the development and commercialization of our product candidates may be delayed, and our business and results of operations may be harmed.

For planning purposes, we sometimes estimate the timing of the accomplishment of various scientific, clinical, regulatory and other product development objectives.

These milestones may include our expectations regarding the commencement or completion of scientific studies and clinical trials, the submission of regulatory filings or commercialization objectives.

From time to time, we may publicly announce the expected timing of some of these milestones, such as the completion of an ongoing clinical trial, the initiation of other clinical programs, receipt of marketing approval or a commercial launch of a product.

For planning purposes, we sometimes estimate the timing of the accomplishment of various scientific, clinical, regulatory and other product development activities or objectives.

These milestones may include our expectations regarding the commencement or completion of scientific studies and clinical trials, the submission of regulatory filings, the timing of regulatory review or approvals, or initiation of commercialization activities or objectives.

From time to time, we may publicly announce the expected timing of some of these milestones, such as the completion of an ongoing clinical trial of a product candidate, the initiation of other clinical programs, receipt of marketing approval or a commercial launch of a product.

The achievement of many of these milestones may be outside of our control.

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• our available capital resources or capital constraints we experience;

• the rate of progress, costs and results of our clinical trials and research and development activities, including the extent of scheduling conflicts with participating clinicians and collaborators;

• our ability to identify, enroll and randomize patients who meet clinical trial eligibility criteria;

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If we fail to achieve announced milestones in the timeframes we expect, the development and commercialization of our product candidates may be delayed, and our business and results of operations may be harmed.

We depend heavily on the success of one or more of our current drug candidates and we cannot be certain that we will be able to obtain regulatory approval for any of our product candidates.

We depend heavily on the success of one or more of our current product candidates and we cannot be certain that we will be able to obtain regulatory approval for or commercialize any of our product candidates.

We are not permitted to market our product candidates in the U.S.

until we receive approval of an NDA from the FDA, or in any foreign countries until we receive the requisite approval from such countries.

Obtaining FDA approval of an NDA is a complex, lengthy, expensive and uncertain process.

The FDA may refuse to permit the filing of our NDA, delay, limit or deny approval of an NDA for many reasons, including, among others:

• if we submit an NDA and it is reviewed by a FDA advisory committee, the FDA may have difficulties scheduling an advisory committee meeting in a timely manner or the advisory committee may recommend against approval of our application or may recommend that the FDA require, as a condition of approval, additional nonclinical or clinical studies, limitations on approved labeling or distribution and use restrictions;

• an FDA advisory committee may recommend, or the FDA may require, a Risk Evaluation and Mitigation Strategies ( REMS) safety program as a condition of approval or post-approval;

• an FDA advisory committee or the FDA or applicable regulatory agency may determine that there is insufficient evidence of overall effectiveness or safety in an NDA and require additional clinical studies;

until we receive approval of a NDA from the FDA, or in any foreign countries until we receive the requisite approval from such countries.

Obtaining FDA approval of a NDA is a complex, lengthy, expensive and uncertain process.

The FDA may refuse to permit the filing of our NDA, delay, limit or deny approval of a NDA for many reasons, including, among others:

• if we submit a NDA and it is reviewed by a FDA advisory committee, the FDA may have difficulties scheduling an advisory committee meeting in a timely manner or the advisory committee may recommend against approval of our application or may recommend that the FDA require, as a condition of approval, additional nonclinical or clinical studies, limitations on approved labeling or distribution and use restrictions;

• a FDA advisory committee may recommend, or the FDA may require, a Risk Evaluation and Mitigation Strategies (REMS) safety program as a condition of approval or post-approval;

• a FDA advisory committee or the FDA or applicable regulatory agency may determine that there is insufficient evidence of overall effectiveness or safety in a NDA and require additional clinical studies;

• the FDA or the applicable foreign regulatory agency may determine that the manufacturing processes or facilities of third-party contract manufacturers with which we contract do not conform to applicable requirements, including cGMPs;

• the FDA or applicable foreign regulatory agency may change its approval policies or adopt new regulations.

Any of these factors, many of which are beyond our control, could jeopardize our ability to obtain regulatory approval for any current or future drug product candidate we may develop.

Any of these factors, many of which are beyond our control, could jeopardize our ability to obtain regulatory approval for and commercialize any current or future drug product candidate we may develop.

Any such setback in our pursuit of regulatory approval for any product candidate would have a material adverse effect on our business and prospects.

In addition, our pherine product candidates, including fasedienol and itruvone, will be subject to regulation as combination products, which means that they are composed of both a drug product and device product.

In addition, all of our pherine product candidates will be subject to regulation as combination products, which means that they are composed of both a drug product and device product.

Although we do not contemplate doing so, if marketed individually, each component would be subject to different regulatory pathways and reviewed by different centers within the FDA.

Our product candidates that are considered to be drug-device combination products will require review and coordination by FDA’s drug and device centers prior to approval, which may delay approval.

As drug-device combination candidates, each will require review and coordination by FDA’s drug and device centers prior to approval, which may delay approval.

In the U.S., a combination product with a drug primary mode of action generally would be reviewed and approved pursuant to the drug approval processes under the Federal Food, Drug and Cosmetic Act of 1938.

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We may also observe safety or tolerability issues with our product candidates in ongoing or future clinical trials.

Many compounds that initially showed promise in clinical or earlier-stage testing are later found to cause undesirable or unexpected side effects that prevented further development of the compound.

Many compounds that initially showed promise in clinical or earlier-stage testing are later found to cause undesirable or unexpected side effects that prevent further development of the compound.

Results of future clinical trials of our product candidates could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics, despite a favorable tolerability profile observed in earlier-stage testing.

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Additionally, if any of our product candidates receives regulatory approval, and we or others later identify undesirable side effects caused by such product, a number of potentially significant negative consequences could result.

For example, the FDA could require us to adopt a Risk Evaluation and Mitigation Strategy (REMS), to ensure that the benefits of treatment with such product candidate outweigh the risks for each potential patient, which may include, among other things, a communication plan to health care practitioners, patient education, extensive patient monitoring or distribution systems and processes that are highly controlled, restrictive and more costly than what is typical for the industry.

For example, the FDA could require us to adopt a REMS, to ensure that the benefits of treatment with such product candidate outweigh the risks for each potential patient, which may include, among other things, a communication plan to health care practitioners, patient education, extensive patient monitoring or distribution systems and processes that are highly controlled, restrictive and more costly than what is typical for the industry.

We may also be required to engage in similar actions, such as patient education, certification of health care professionals or specific monitoring, if we or others later identify undesirable side effects caused by any product.

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Any of these events could diminish the usage or otherwise limit the commercial success of our product candidates and prevent us from achieving or maintaining market acceptance of our product candidates, if approved by the FDA or other regulatory authorities.

If any of our product candidates are ultimately regulated as controlled substances, we, our CMOs, as well as future distributors, prescribers, and dispensers will be required to comply with additional regulatory requirements which could delay the marketing of our product candidates, and increase the cost and burden of manufacturing, distributing, dispensing, and prescribing our product candidates.

If any of our product candidates are ultimately regulated as controlled substances, we, our CDMOs, as well as future distributors, prescribers, and dispensers will be required to comply with additional regulatory requirements which could delay the marketing of our product candidates, and increase the cost and burden of manufacturing, distributing, dispensing, and prescribing our product candidates.

Before we can commercialize our product candidates in the U.S.

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Although we currently do not know whether the DEA or any foreign counterpart will consider any of our current or future product candidates to be controlled substances, we cannot yet give any assurance that such product candidates will not be regulated as controlled substances.

If any of our product candidates are regulated as controlled substances, depending on the DEA controlled substance schedule in which the product candidates are placed or that of its foreign counterpart, we, our CMOs, and any future distributors, prescribers, and dispensers of the scheduled product candidates may be subject to significant regulatory requirements, such as registration, security, recordkeeping, reporting, storage, distribution, importation, exportation, inventory, quota and other requirements administered by the DEA or a foreign counterpart of the DEA as the case may be.

Moreover, if any of our product candidates are regulated as controlled substances, we and our CMOs would be subject to initial and periodic DEA inspection.

If we or our CMOs are not able to obtain or maintain any necessary DEA registrations or comparable foreign registrations, we may not be able to commercialize any product candidates that are deemed to be controlled substances or we may need to find alternative CMOs, which would take time and cause us to incur additional costs, delaying or limit our commercialization efforts.

If any of our product candidates are regulated as controlled substances, depending on the DEA controlled substance schedule in which the product candidates are placed or that of its foreign counterpart, we, our CDMOs, and any future distributors, prescribers, and dispensers of the scheduled product candidates may be subject to significant regulatory requirements, such as registration, security, recordkeeping, reporting, storage, distribution, importation, exportation,

inventory, quota and other requirements administered by the DEA or a foreign counterpart of the DEA as the case may be.

Moreover, if any of our product candidates are regulated as controlled substances, we and our CDMOs would be subject to initial and periodic DEA inspection.

If we or our CDMOs are not able to obtain or maintain any necessary DEA registrations or comparable foreign registrations, we may not be able to commercialize any product candidates that are deemed to be controlled substances or we may need to find alternative CDMOs, which would take time and cause us to incur additional costs, delaying or limiting our commercialization efforts.

Because of their restrictive nature, these laws and regulations could limit commercialization of our product candidates, should they be deemed to contain controlled substances.

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Individual states also independently regulate controlled substances.

We have concentrated our research and development efforts on the treatment of psychiatric and neurological disorders, a field that faces certain challenges in drug development.

We have focused our research and development efforts on addressing psychiatric and neurological disorders.

We have concentrated a significant portion of our research and development efforts on the treatment of neuropsychiatric and neurological disorders, a field that faces certain challenges in drug development.

We have focused a significant portion of our research and development efforts on addressing neuropsychiatric and neurological disorders.

Efforts by pharmaceutical companies in this field have faced certain challenges in drug development.

In particular, many neuroscience disorders such as anxiety and depression disorders rely on subjective assessments by clinicians and subjective patient-reported outcomes as key endpoints.

In particular, many neuropsychiatric disorders such as SAD and MDD rely on subjective assessments by clinicians and subjective patient-reported outcomes as key efficacy endpoints.

This makes them more difficult to evaluate than indications with more objective endpoints.

Furthermore, these indications are often subject to a placebo effect, which may make it more challenging to isolate the beneficial effects of our product candidates.

There can be no guarantee that we will successfully overcome these challenges with our product candidates or that we will not encounter other challenges in the development of our product candidates.

Furthermore, these indications are often subject to a placebo effect, which may make it more challenging to isolate the beneficial effects of our neuropsychiatric product candidates.

There can be no guarantee that we will successfully overcome these challenges with our neuropsychiatric product candidates or that we will not encounter other challenges in the development of our other product candidates.

Even if any of our product candidates receives regulatory approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success, in which case we may not generate significant revenues or become profitable.

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• the efficacy and safety of the product;

• the potential advantages of the product compared to competitive therapies;

• the potential advantages of the product compared to any competitive therapies;

• the prevalence and severity of any side effects;

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If we fail to develop and commercialize other product candidates, we may be unable to grow our business and our ability to achieve our strategic objectives would be impaired.

Although the development and commercialization of our current product candidates are our initial focus, as part of our longer-term growth strategy, we plan to develop other product candidates.

We intend to evaluate internal opportunities from our existing product candidates or other potential product candidates, and also may choose to in-license or acquire other product candidates to treat patients suffering from other disorders with significant unmet medical needs and limited treatment options.

These other potential product candidates will require additional, time-consuming development efforts prior to commercial sale, including preclinical studies, clinical trials and approval by the FDA and applicable foreign regulatory authorities.

All product candidates are prone to the risks of failure that are inherent in pharmaceutical product

development, including the possibility that the product candidate will not be shown to be sufficiently safe and effective for approval by regulatory authorities.

Although the development and commercialization of our most advanced pherine product candidate, fasedienol, is currently our primary focus, as part of our longer-term growth strategy, we plan to develop other of our clinical stage pherine product candidates.

We intend to evaluate internal opportunities from our existing pherine pipeline, and also may choose to in-license or acquire other product candidates to treat patients suffering from other disorders with significant unmet medical needs and limited treatment options.

These other potential product candidates will require additional, time-consuming development efforts prior to commercial sale, including manufacturing, preclinical studies, clinical trials and approval by the FDA and applicable foreign regulatory authorities.

All product candidates are prone to the risks of failure that are inherent in pharmaceutical product development, including the possibility that the product candidate will not be shown to be sufficiently safe and effective for approval by regulatory authorities.

In addition, we cannot assure you that any such products that are approved will be manufactured or produced economically, successfully commercialized or widely accepted in the marketplace or be more effective than other commercially available alternatives.

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We may not be able to acquire the rights to additional product candidates on terms that we find acceptable, or at all.

In addition, future acquisitions may entail numerous operational and financial risks, including:

In addition, should we seek to acquire additional product candidates, future acquisitions may entail numerous operational and financial risks, including:

• exposure to unknown liabilities;

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Even if such product candidates are successfully developed and approved, the markets for our products may be smaller than we expect and our revenue potential and ability to achieve profitability may be materially adversely affected.

Our pipeline includes product candidates for a variety of neuroscience disorders.

There is no precise method of establishing the actual number of patients with any of these disorders in any geography over any time period.

Our neuroscience pipeline includes product candidates for a variety of conditions and disorders.

There is no precise method of establishing the actual number of patients with any of these conditions and disorders in any geography over any time period.

With respect to many of the indications in which we have developed, are developing, or plan to develop our product candidates, we have estimates of the prevalence of the disease or disorder.

Our estimates as to prevalence may not be accurate, and the actual prevalence or addressable patient population for some or all of those indications, or any other indication that we elect to pursue, may be significantly smaller than our estimates.

In estimating the potential prevalence of indications we are pursuing, or may in the future pursue, including our estimates as to the prevalence of SAD, MDD and vasomotor symptoms (hot flashes) due to menopause, we apply assumptions to available information that may not prove to be accurate.

In estimating the potential prevalence of indications we are pursuing, or may in the future pursue, including, among others, our estimates as to the prevalence of SAD, MDD and vasomotor symptoms (hot flashes) due to menopause, we apply assumptions to available information that may not prove to be accurate.

In each case, there is a range of estimates in the published literature and in marketing studies, which include estimates within the range that are lower than our estimates.

The actual number of patients with these disease indications may, however, be significantly lower than we believe.

The actual number of patients with these and other disease indications may, however, be significantly lower than we believe.

Even if our prevalence estimates are correct, our product candidates may be developed for only a subset of patients with the relevant disease or disorder or our products, if approved, may be indicated for or used by only a subset.

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Competitive products may reduce or eliminate the commercial opportunity for our product candidates, if approved.

If our competitors develop technologies or product candidates more rapidly than we do, or their technologies or product candidates are more effective or safer than ours, our ability to develop and successfully commercialize our product candidates may be adversely affected.

If our competitors develop technologies or product candidates more rapidly than we do, or their technologies or product candidates are more effective and/or safer than ours, our ability to develop and successfully commercialize our product candidates may be adversely affected.

The clinical and commercial landscapes for the treatment of neuroscience disorders, including those we are pursuing, are highly competitive and subject to rapid and significant technological change.

We face competition with respect to our indications for our product candidates and will face competition with respect to any other drug candidates that we may seek to develop or commercialize in the future, from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide.

There are a number of large pharmaceutical and biotechnology companies that currently market and sell drugs or are pursuing the development of drug candidates for the treatment of the indications that we are pursuing.

There are a number of large pharmaceutical and biotechnology companies that

currently market and sell drugs or are pursuing the development of drug candidates for the treatment of the indications that we are pursuing.

Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization.

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If any of our product candidates are approved, it could compete with a range of therapeutic treatments that are in development.

In addition, our competitors may succeed in developing, acquiring or licensing technologies and drug

products that are more effective or less costly than our product candidates, which could render our product candidates obsolete and noncompetitive.

In addition, our competitors may succeed in developing, acquiring or licensing technologies and drug products that are more effective or less costly than our product candidates, which could render our product candidates obsolete and noncompetitive.

If we obtain approval for any of our product candidates, we may face competition based on many different factors, including the efficacy, safety and tolerability of our products, the ease with which our products can be administered, the timing and scope of regulatory approvals for these products, the availability and cost of manufacturing, marketing and sales capabilities, price, reimbursement coverage and patent position.

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We currently have no marketing, sales or distribution capabilities.

We intend to establish a sales and marketing organization, either on our own or in collaboration with third parties, with technical expertise and supporting distribution capabilities to commercialize one or more of our product candidates that may receive regulatory approval in key territories.

We intend to establish a sales and marketing capabilities, either on our own or in collaboration with third parties, with technical expertise and supporting distribution capabilities to commercialize one or more of our product candidates that may receive regulatory approval in key territories.

These efforts will require substantial additional resources, some or all of which may be incurred in advance of any approval of the product candidate.

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Factors that may inhibit our efforts to commercialize our product candidates on our own include:

• lack of sufficient capital resources available to us in a timely manner, if at all, and on commercially reasonable terms;

• our inability to recruit and retain adequate numbers of effective sales and marketing leadership and sales personnel;

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• unforeseen costs and expenses associated with creating an independent sales and marketing organization.

With respect to our existing and future product candidates, we may choose to collaborate with third parties that have direct sales forces and established distribution systems to serve as an alternative to our own sales force and distribution systems.

Our future product revenue may be lower than if we directly marketed or sold our product candidates, if approved.

In that case, our future product revenue would be lower than if we directly marketed or sold our product candidates, if approved, on our own.

In addition, any revenue we receive will depend in whole or in part upon the efforts of these third parties, which may not be successful and are generally not within our control.

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If we are unable to maintain sufficient insurance coverage at an acceptable cost or to otherwise protect against potential product liability claims, it could prevent or inhibit the development and commercial production and sale of our product candidates, which could harm our business, financial condition, results of operations and prospects.

Cyberattacks or other failures in our telecommunications or information technology systems, or those of our collaborators, CROs, third-party logistics providers, distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption of our business operations.

We, along with our collaborators, CROs, third-party logistics providers, distributors and other contractors and consultants, utilize information technology (IT) systems and networks to process, transmit and store electronic information, including confidential information such as proprietary business information and personal information of our employees and contractors, in connection with our business activities.

and other social engineering schemes, employee theft or misuse, human error, fraud, denial or degradation of service attacks, sophisticated nation-state and nation-state-supported actors, natural disasters, terrorism, war, telecommunication and electrical failures or other threats.

Cyberattacks or other failures in our telecommunications or information technology systems, or those of our collaborators, CDMOs, CROs, third-party logistics providers, distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption of our business operations.

We, along with our collaborators, CDMOs, CROs, third-party logistics providers, distributors and other contractors and consultants, utilize information technology (IT) systems and networks to process, transmit and store electronic information, including confidential information such as proprietary business information and personal information of our employees and contractors, in connection with our business activities.

As use of digital technologies has increased, our IT systems and those of our third-party service providers, strategic partners and other contractors or consultants are increasingly vulnerable to attack, damage and interruption from cyber incidents, including third parties gaining access to employee accounts using stolen or inferred credentials, computer malware (e.g., ransomware), viruses, malicious code, spamming, phishing attacks and other social engineering schemes, employee theft or misuse, human error, fraud, denial or degradation of service attacks, sophisticated nation-state and nation-state-supported actors, natural disasters, terrorism, war, telecommunication and electrical failures or other threats.

Deliberate attacks and attempts to gain unauthorized access to computer systems and networks, have increased in frequency and sophistication.

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If we are unable to do so, we may have to curtail the development of the product candidate for which we are seeking to collaborate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.

If we elect to increase our expenditures to fund development or commercialization activities on our own, we will need to obtain additional capital, which may not be available to us on

acceptable terms or at all.

If we elect to increase our expenditures to fund development or commercialization activities on our own, we will need to obtain additional capital, which may not be available to us on acceptable terms or at all.

If we do not have sufficient funds, we may not be able to further develop our product candidates or bring them to market and generate product revenue.

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Any such termination or expiration would adversely affect us financially and could harm our business reputation.

Our future growth may depend, in part, on our ability to penetrate foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties.

Our future profitability may depend, in part, on our ability to develop and commercialize our product candidates with third-party collaborators in foreign markets.

If we develop and commercialize our product candidates in foreign markets, we would be subject to additional risks and uncertainties, including:

• our customers’ ability to obtain reimbursement for our product candidates in foreign markets;

Our future growth may depend, in part, on our ability to penetrate markets outside of the U.S., where we would be subject to additional regulatory burdens and other risks and uncertainties.

Our future profitability may depend, in part, on our ability to develop and commercialize our product candidates with third-party collaborators in markets outside of the U.S.

If we develop and commercialize our product candidates in markets outside of the U.S., we would be subject to additional risks and uncertainties, including:

• our customers’ ability to obtain reimbursement for our product candidates;

• our inability to directly control commercial activities because we are relying on third parties;

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• the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.

Foreign sales of our product candidates could also be adversely affected by the imposition of governmental controls, political and economic instability, trade restrictions and changes in tariffs.

Sales of our product candidates outside of the U.S.

could also be adversely affected by the imposition of governmental controls, political and economic instability, trade restrictions and changes in tariffs.

If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.

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We also could incur significant costs associated with civil or criminal fines and penalties.

Although we maintain workers’ compensation insurance to cover us for costs and expenses, we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against

potential liabilities.

We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous or radioactive materials.

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Risks Related to Managing Our Business and Operations

We depend heavily on our executive officers, third-party consultants and others and our ability to compete in the biotechnology and pharmaceutical industries depends upon our ability to attract and retain highly qualified managerial, scientific and medical personnel.

The loss of their services or our inability to hire and retain such personnel would materially harm our business.

Our success depends, and will likely continue to depend, upon our ability to hire, and our ability to retain the services of our executive officers and other key employees within our organization.

Our executive officers and other key employees may terminate their employment with us at any time.

We depend heavily on our senior managerial personnel, third-party consultants and others and our ability to compete in the biopharmaceutical industry depends upon our ability to retain such highly qualified personnel.

The loss of their services or our inability to hire such personnel could materially harm our business.

Our success depends, and will likely continue to depend, upon our ability to attract and retain the services of our executive officers, senior managerial and other senior personnel within our organization.

Our executive officers and other senior employees may terminate their employment with us at any time.

The loss of their services might impede the achievement of our operational and strategic objectives.

Our ability to compete in the biotechnology and pharmaceutical industries depends upon our ability to attract and retain highly qualified managerial, scientific, medical, and technical personnel.

Moreover, our ability to compete in the biopharmaceutical industry depends upon our ability to attract and retain highly qualified managerial, scientific, medical, regulatory and technical personnel.

In particular, we will need to retain and, in some cases, hire, qualified personnel with expertise in clinical development and operations, preclinical research and development, manufacturing, quality management, medical and regulatory affairs, finance and accounting and other areas in connection with the continued development and commercialization of our product candidates.

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Our industry has experienced a high rate of turnover of management personnel in recent years.

Replacing executive officers or other key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to develop, gain regulatory approval of and commercialize products successfully and the culture fit to be a leader in our organization.

Replacing executive officers or other key employees may be difficult and may take an extended period of time because of the limited number of

individuals in our industry with the breadth of skills and experience required to develop, gain regulatory approval of and commercialize products successfully and the culture fit to be a leader in our organization.

Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these additional key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel.

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We may not be able to hire and/or retain a sufficient number of employees or employees with the required expertise to develop our product candidates or operate our business successfully.

As of March 31, 2024, we had 38 full-time employees.

As of March 31, 2025, we had 53 full-time employees, and two part time employees.

Our focus on the development of our lead product candidates requires us to optimize cash utilization and to manage and operate our business in a highly efficient manner.

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If we are not able to effectively expand our organization by hiring new qualified employees, our clinical trials may be delayed or terminated, we may not be able to successfully execute the tasks necessary to further develop and commercialize our product candidates and, accordingly, may not achieve our development and commercialization goals.

Our employees, independent contractors, consultants, collaborators and CROs may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements, which could cause significant liability for us and harm our reputation.

We are exposed to the risk that our employees, independent contractors, consultants, collaborators and CROs may engage in fraudulent conduct or other illegal activity.

Our employees, independent contractors, consultants, collaborators, CDMOs and CROs may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements, which could cause significant liability for us and harm our reputation.

We are exposed to the risk that our employees, independent contractors, consultants, collaborators, CDMOs and CROs may engage in fraudulent conduct or other illegal activity.

It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.

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Additionally, we are subject to the risk that a person or government could allege such fraud or other misconduct, even if none occurred.

If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement, integrity oversight and reporting obligations, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could have a material adverse effect on our ability to operate our business and our results of operations.

If any such actions are instituted against

us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement, integrity oversight and reporting obligations, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could have a material adverse effect on our ability to operate our business and our results of operations.

We expect to expand our organization, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

We expect to experience significant growth in the number of our employees and the scope of our operations.

We expect to continue to experience significant growth in the number of our employees and the scope of our operations.

To manage these growth activities, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel.

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If we are unable to effectively manage our expected growth, our expenses may increase more than expected, our ability to generate revenues could be reduced and we may not be able to implement our business strategy, including the successful commercialization of our product candidates.

Unfavorable global economic or political conditions could adversely affect our business, financial condition or results of operations.

Our results of operations could be adversely affected by global political conditions, as well as general conditions in the global economy and in the global financial and stock markets.

Global financial and political crises cause extreme volatility and disruptions in the capital and credit markets.

Unfavorable domestic or global economic or political conditions could adversely affect our business, financial condition or results of operations.

Our results of operations could be adversely affected by either domestic or global political conditions, as well as general conditions in the domestic or global economy and in the U.S.

and global financial and stock markets.

Domestic and global financial and political crises cause extreme volatility and disruptions in the capital and credit markets.

A severe or prolonged economic downturn, such as the economic downturn triggered by the COVID-19 pandemic, could result in a variety of risks to our business, including, weakened demand for our product candidates and our ability to raise additional capital when needed on acceptable terms, if at all.

A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our services.

A weak or declining domestic or global economy could also strain our suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our services.

Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

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Natural disasters could severely disrupt our operations, and have a material adverse effect on our business, results of operations, financial condition and prospects.

If a natural disaster, power outage or other event occurred that prevented us from using all or a significant portion of our headquarters, that damaged critical infrastructure, such as the manufacturing facilities of our third-party CMOs, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time.

If a natural disaster, power outage or other event occurred that prevented us from using all or a significant portion of our headquarters, that damaged critical infrastructure, such as the manufacturing facilities of our third-party CDMOs, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time.

The disaster recovery and business continuity plan we have in place may prove inadequate in the event of a serious disaster or similar event.

We may incur substantial expense as a result of the limited nature of our disaster recovery and business continuity plans, which could have a material adverse effect on our business.

Remote working arrangements could significantly increase the Company ’ s digital and cybersecurity risks.

Remote working arrangements could significantly increase our digital and cybersecurity risks.

Most of our employees are geographically dispersed from our headquarters facility in South San Francisco and now routinely work remotely.

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Techniques or software used to gain unauthorized access, and/or disable, degrade, or harm our systems may be difficult to detect for prolonged periods of time, and we may be unable to anticipate these techniques or put in place protective or preventive measures.

The damage or disruption of our systems, or the theft or compromise of our technology, data, or intellectual property, may negatively impact our business, financial condition and results of operations, reputation, stock price and long-term value, which could adversely affect our business.

The damage or disruption of our systems, or the theft or compromise of our technology, data, or intellectual property, may

negatively impact our business, financial condition and results of operations, reputation, stock price and long-term value, which could adversely affect our business.

Current politics in the U.S.

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The current political environment in the U.S.

has led many incumbents and political candidates to propose various measures to reduce the prices for pharmaceuticals.

These proposals may receive increasing publicity which, in turn, may cause the investing public to reduce the perceived value of pharmaceutical companies.

is volatile, and recent or future regulatory changes, especially at the FDA, have resulted, and may continue to result, in uncertainty throughout the pharmaceutical industry and, have an adverse effect on our business and the value of our securities.

This political and regulatory uncertainty may receive increasing publicity which, in turn, may cause the investing public to reduce the perceived value of pharmaceutical companies.

Any decrease in the overall perception of the pharmaceutical industry may have an adverse impact on our share price and may limit our ability to raise capital needed to continue our drug development programs.

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If they do not perform satisfactorily, we may not be able to obtain regulatory approval or commercialize our product candidates, or such approval or commercialization may be delayed, and our business could be substantially harmed.

We have relied upon and plan to continue to rely on third parties, such as CROs, clinical data management organizations, medical institutions and clinical investigators, to conduct our clinical trials and expect to rely on these third parties to conduct clinical trials of any product candidate that we develop.

We have relied upon and plan to continue to rely on third parties, such as CROs, clinical data management organizations, medical institutions and clinical investigators, to augment our internal personnel in the conduct of our clinical trials and expect to rely on these third parties to augment our efforts to conduct clinical trials of any product candidate that we develop.

Our ability to complete clinical trials in a timely fashion depends on a number of key factors.

These factors include protocol design, regulatory and IRB or ethics committee approval, patient enrollment rates and compliance with GCPs.

We have opened clinical trial sites and are enrolling patients in a number of countries where our experience is limited.

In most cases, we use the services of third parties, including CROs, to carry out our clinical trial-related activities and rely on such parties to accurately report their results.

on third parties for clinical development activities may impact or limit our control over the timing, conduct, expense and quality of our clinical trials.

In most cases, we use the services of third parties, including CROs, to carry out many of clinical trial-related activities and rely on such parties to accurately report their results.

Our reliance on third parties for clinical development activities may impact or limit our control over the timing, conduct, expense and quality of our clinical trials.

Moreover, the FDA and certain foreign regulatory authorities require us to comply with GCPs for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.

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We remain responsible for ensuring that each of our trials is conducted in accordance with the applicable protocol, legal and regulatory requirements and scientific standards.

Our failure or the failure of third parties to comply with the applicable protocol, legal and regulatory requirements and scientific standards can result in rejection of our clinical trial data or other sanctions.

Our failure, or the failure of our third-party contract manufacturers, to comply with applicable protocol, legal and regulatory requirements and scientific standards could result in, among other things, rejection of our clinical data, sanctions being imposed on us, including clinical holds, a refusal to file determination by the FDA, receipt of a complete response letter (CRL), fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates, operating restrictions and criminal prosecutions, any of which could significantly affect our ability to achieve regulatory approval of our product candidates.

If we or our third-party clinical trial providers or third-party CROs do not successfully carry out these clinical activities, our clinical trials or the potential regulatory approval of a product candidate may be delayed or be unsuccessful.

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Furthermore, at clinical trial sites, the availability of staff and trial participants has been limited due to a decrease in the number of clinical investigative sites across the globe.

Accordingly, enrollment in some of our clinical trials may be slower than expected as a result of these changes in the post-COVID clinical trial landscape.

Accordingly, enrollment and randomization of subjects in some of our clinical trials may be slower than expected as a result of these changes in the post-COVID clinical

trial landscape.

These contractors may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other drug development activities, which could impede their ability to devote appropriate time to our clinical programs.

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In such an event, our financial results and the commercial prospects for any product candidates that we seek to develop could be harmed, our costs could increase and our ability to generate revenues could be delayed, impaired or foreclosed.

We also rely on other third parties to manufacture, store and distribute drug supplies for our clinical trials.

We also rely on third party CDMOs and others to manufacture, store and distribute drug supplies for our clinical trials.

Any performance failure on the part of these third-parties could delay clinical development or regulatory approval of our product candidates or commercialization of any resulting products, producing additional losses and depriving us of potential product revenue.

Any of the third-party organizations we utilize may terminate their engagements with us under certain circumstances.

The replacement of an existing CRO or other third party may result in the delay of the affected trials or otherwise adversely affect our efforts to obtain regulatory approvals and commercialize our product candidates.

The replacement of an existing CRO, manufacturer or other third party may result in the delay of the affected trials or otherwise adversely affect our efforts to obtain regulatory approvals and commercialize our product candidates.

Although we believe we have diversified our risk by engaging a number of CROs and other third-party organizations and there are a number of other CROs we could engage to continue these activities, we may not be able to enter into alternative arrangements or do so on commercially reasonable terms or in a timely manner.

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As a result, delays may occur, which could negatively impact our ability to meet our expected clinical development timelines and harm our business, financial condition and prospects.

In particular, we plan to rely on a hybrid functional service provider (FSP), approach, where, rather than relying on a small number of third-party services providers for a full suite of services, we plan to use a wider number of third-party service providers on an à la carte basis grouped by specific function.

We may not be able to realize the cost savings typically associated with the hybrid FSP approach, or this approach may require us to incur increased startup or integration costs.

Our hybrid FSP approach may also require us to manage and monitor an increased number of service providers and contractual relationships.

Finally, this approach may require us to handle certain functions internally rather than

outsourcing them to third parties.

Handling these functions internally may require us to spend more time and capital hiring and training employees, and any failure to do so successfully may negatively impact our operations.

Our use of third parties to manufacture our product candidates may increase the risk that we will not have sufficient quantities of our product candidates, raw materials, active pharmaceutical ingredients (APIs) or drug products when needed or at an acceptable cost.

Our use of third party contract manufactures to manufacture our product candidates may increase the risk that we will not have sufficient quantities of our product candidates, raw materials, active pharmaceutical ingredients (APIs) or drug products when needed or at an acceptable cost.

We do not own or operate manufacturing facilities for the production of clinical or commercial quantities of our product candidates, and we lack the resources and the capabilities to do so.

Our current strategy is to outsource all manufacturing of our product candidates to third parties.

We currently rely on and engage third-party manufacturers to provide all of the API and the final drug product formulation of all of our product candidates that are being used in our clinical trials and preclinical studies.

Our current strategy is to outsource all manufacturing of our product candidates to third party contract manufacturers.

We currently rely on and engage third-party contract manufacturers to provide all of the API and the final filled and finished drug product formulation of all of our product candidates that are being used in our clinical trials and preclinical studies.

Although we believe that there are several potential alternative manufacturers who could manufacture our product candidates, we may incur added costs and delays in identifying and qualifying any such replacement.

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There may be difficulties in scaling up to commercial quantities and formulation of our product candidates, and the costs of manufacturing could be prohibitive.

Many of the third-party manufacturers we rely on have only recently begun working with us and have limited or no experience manufacturing our API and final drug products.

If our manufacturers have difficulty or suffer delays in successfully manufacturing material that meets our specifications, it may limit supply of our product candidates and could delay our clinical trials.

Even if we are able to establish and maintain arrangements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:

The third-party contract manufacturers we rely on from time to time may have limited or no experience manufacturing our API and final drug products.

If our third-party contract manufacturers have difficulty or suffer delays in successfully manufacturing material that meets our specifications, it may limit supply of our product candidates and could delay our clinical trials.

Even if we are able to establish and maintain arrangements with third-party contract manufacturers, reliance on third-party contract manufacturers entails additional risks, including:

• the failure of the third-party manufacturer to comply with applicable regulatory requirements and reliance on third parties for manufacturing process development, regulatory compliance and quality assurance;

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• the possible misappropriation of our proprietary information, including our trade secrets and know-how.

If we do not maintain our key manufacturing relationships, we may fail to find replacement manufacturers or develop our own manufacturing capabilities, which could delay or impair our ability to obtain regulatory approval for our product candidates.

If we do find replacement manufacturers, we may not be able to enter into agreements with them on terms and conditions favorable to us and there could be a substantial delay before new facilities could be qualified and registered with the FDA and other foreign regulatory authorities.

Additionally, if any third-party manufacturer with whom we contract fails to perform its obligations, we may be forced to manufacture the materials ourselves, for which we may not have the capabilities or resources, or enter into an agreement with a different manufacturer.

If we do not maintain our key third-party contract manufacturing relationships, we may fail to find replacement manufacturers or develop our own manufacturing capabilities, which could delay or impair our ability to obtain regulatory approval for our product candidates.

If we do find replacement third-party contract manufacturers, we may not be able to enter into agreements with them on terms and conditions favorable to us and there could be a substantial delay before new facilities could be qualified and registered with the FDA and other foreign regulatory authorities.

Additionally, if any third-party contract manufacturer with whom we contract fails to perform its obligations, we may be forced to manufacture the materials ourselves, for which we do not and may not ever have the capabilities or resources, or enter into an agreement with a different manufacturer.

In either scenario, our clinical trials supply could be delayed significantly as we establish alternative supply sources.

In some cases, the technical skills required to manufacture our product candidates may be unique or proprietary to the original manufacturer and we may have difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills to a back-up or alternate supplier, or we may be unable to transfer such skills at all.

In addition, if we are required to change third-party manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations.

In some cases, the technical skills required to manufacture our product candidates may be unique or proprietary to the original third-party contract manufacturer and we may have difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills to a back-up or alternate supplier, or we may be unable to transfer such skills at all.

In addition, if we are required to change third-party manufacturers for any reason, we will be required to verify that the new third-party contract manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations.

We will also need to verify, such as through a manufacturing comparability study, that any new manufacturing process will produce our product candidate according to the specifications previously submitted to the FDA or another regulatory authority.

We may be unsuccessful in demonstrating the comparability of clinical supplies, which could require

the conduct of additional clinical trials.

We may be unsuccessful in demonstrating the comparability of clinical supplies, which could require the conduct of additional clinical trials.

The delays associated with the verification of a new third-party manufacturer could negatively affect our ability to develop product candidates or commercialize our products in a timely manner or within budget.

Furthermore, a third-party manufacturer may possess technology related to the manufacture of our product candidate that such third party owns independently.

This would increase our reliance on such third-party manufacturer or require us to obtain a license from such third-party manufacturer in order to have another third party manufacture our product candidates.

Furthermore, a third-party contract manufacturer may possess technology related to the manufacture of our product candidate that such third party owns independently.

This would increase our reliance on such third-party contract manufacturer or require us to obtain a license from such third-party contract manufacturer in order to have another third party manufacture our product candidates.

If any of our product candidates is approved by any regulatory agency, we intend to utilize arrangements with third-party contract manufacturers for the commercial production of those products.

This process is difficult and time consuming and we may face competition for access to manufacturing facilities as there are a limited number of contract manufacturers operating under cGMPs that are capable of manufacturing our product candidates.

Consequently, we may not be able to reach agreement with third-party manufacturers on satisfactory terms, which could delay our commercialization.

Some of our manufacturers are located outside of the U.S.

Consequently, we may not be able to reach agreement with third-party contract manufacturers on satisfactory terms, which could delay our commercialization.

Some of our third-party contract manufacturers are located outside of the U.S.

There is currently significant uncertainty about the future relationship between the U.S.

and various other countries, including China, with respect to trade policies, treaties, government regulations and tariffs.

and various other countries, including Canada, China, India, Mexico and the United Kingdom with respect to trade policies, treaties, government regulations and tariffs.

Increased tariffs could potentially disrupt our existing supply chains and impose additional costs on our business.

Additionally, it is possible further tariffs may be imposed that could affect imports of APIs used in our product candidates, or our business may be adversely impacted by retaliatory trade measures taken by China or other countries, including restricted access to such raw materials used in our product candidates.

Given the unpredictable regulatory environment in China and the U.S.

Additionally, it is possible further tariffs may be imposed that could affect imports of APIs used in our product candidates, or our business may be adversely impacted by retaliatory trade measures taken by Canada, China, India, Mexico and the United Kingdom or other countries, including restricted access to raw materials we may use in our product candidates.

Given the unpredictable regulatory environment in the U.S.

and uncertainty regarding how the U.S.

or foreign governments will act with respect to tariffs, international trade agreements and policies, further governmental action related to tariffs, additional taxes, regulatory changes or other retaliatory trade measures in the future could occur with a corresponding detrimental impact on our business and financial condition.

Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, seizures or voluntary recalls of product candidates, operating restrictions and criminal prosecutions, any of which could significantly affect supplies of our product candidates.

Our failure, or the failure of our third-party contract manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, seizures or voluntary recalls of product candidates, operating restrictions and criminal prosecutions, any of which could significantly affect supplies of our product candidates.

The facilities used by our contract manufacturers to manufacture our product candidates must be evaluated by the FDA or comparable foreign regulatory authorities in connection with any NDA or other application we may submit.

We do not control the manufacturing process of, and are completely dependent on, our contract manufacturing partners for compliance with cGMPs and similar foreign requirements.

If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others, we may not be able to secure and/or maintain regulatory approval for our product candidates manufactured at these facilities.

In addition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel.

If the FDA finds deficiencies or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates, if approved.

Contract manufacturers may face manufacturing or quality control problems causing drug substance production and shipment delays or a situation where the contractor may not be able to maintain compliance with the applicable cGMP requirements.

If our third-party contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others, we may not be able to secure and/or maintain regulatory approval for our product candidates manufactured at these facilities.

In addition, we have no control over the ability of our third-party contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel.

If the FDA finds deficiencies or a comparable foreign regulatory authority does not approve these facilities for

the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates, if approved.

Third-party contract manufacturers may face manufacturing or quality control problems causing drug substance production and shipment delays or a situation where the contractor may not be able to maintain compliance with the applicable cGMP requirements.

Any failure to comply with cGMP and similar foreign requirements or other FDA and comparable foreign regulatory requirements could adversely affect our clinical research activities and our ability to develop our product candidates and market our products, if approved.

The FDA and other foreign regulatory authorities require manufacturers to register manufacturing facilities.

The FDA and other foreign regulatory authorities require our third-party contract manufacturers to register manufacturing facilities.

The FDA and corresponding foreign regulators also inspect these facilities to confirm compliance with cGMPs and similar foreign requirements.

Any failure to comply with cGMP requirements or other FDA and comparable foreign regulatory requirements could adversely affect our clinical research activities and our ability to develop our product candidates and market our products following approval, if obtained.

Failure of any third-party manufacturer to comply with cGMP requirements for applicable drug/device combination products could significantly affect supplies of our product candidates.

We expect our pherine product candidates, fasedienol, itruvone, PH15, PH80 and PH284, will be considered drug-device combination products.

Third-party manufacturers may not be able to comply with cGMP requirements applicable to drug/device combination products, including applicable provisions of the FDA’s or a comparable foreign regulatory authority’s drug cGMP regulations, device cGMP requirements embodied in the Quality System Regulation ( QSR ) or similar regulatory requirements outside the U.S.

Our failure, or the failure of our third-party manufacturers, to comply with

applicable regulations could result in material adverse effects, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates, operating restrictions and criminal prosecutions, any of which could significantly affect supplies of our product candidates.

If any third-party manufacturer of our product candidates is unable to increase the scale of its production of our product candidates or increase the product yield of its manufacturing, then our manufacturing costs may increase and commercialization may be delayed.

In order to produce sufficient quantities to meet the demand for clinical trials and, if approved, subsequent commercialization of our product candidates, our third-party manufacturers will be required to increase their production and optimize their manufacturing processes while maintaining the quality of our product candidates.

Failure of any third-party contract manufacturer to comply with cGMP requirements for applicable drug/device combination products could significantly affect supplies of our product candidates.

We expect each of our current clinical-stage pherine product candidates, fasedienol, itruvone, PH15, PH80 and PH284, will be considered drug-device combination products.

Third-party contract manufacturers may not be able to comply with cGMP requirements applicable to drug/device combination products, including applicable provisions of the FDA’s or a comparable foreign regulatory authority’s drug cGMP regulations, device cGMP requirements embodied in the Quality System Regulation (QSR) or similar regulatory requirements outside the U.S.

Our failure, or the failure of our third-party contract manufacturers, to comply with applicable regulations could result in material adverse effects, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates, operating restrictions and criminal prosecutions, any of which could significantly affect supplies of our product candidates.

If any third-party contract manufacturer of our product candidates is unable to increase the scale of its production of our product candidates or increase the product yield of its manufacturing, then our manufacturing costs may increase and commercialization may be delayed.

In order to produce sufficient quantities to meet the demand for clinical trials and, if approved, subsequent commercialization of our product candidates, our third-party contract manufacturers will be required to increase their production and optimize their manufacturing processes while maintaining the quality of our product candidates.

The transition to larger scale production could prove difficult.

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For example, even if the FDA grants marketing approval of a product candidate, comparable foreign regulatory authorities must also approve the manufacturing and marketing of the product candidate in those countries.

Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the U.S., including additional preclinical studies or clinical trials, as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions.

Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the U.S.,

including additional preclinical studies or clinical trials, as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions.

In many jurisdictions outside the U.S., a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction.

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These designations may confer benefits such as additional interaction with regulatory authorities and eligibility for expedited review procedures.

However, there can be no assurance that we will successfully obtain such designations for

our product candidates.

However, there can be no assurance that we will successfully obtain such designations for our product candidates.

In addition, while such designations could expedite the development or approval process, they generally do not change the standards for approval.

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A breakthrough therapy is defined as a drug or biologic that is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the therapy may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

For a product candidate that have been designated as a Breakthrough Therapy, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens.

For a product candidate that has been designated as a Breakthrough Therapy, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens.

Product candidates receiving Breakthrough Therapy designation also receive the same benefits associated with Fast Track designation, described below.

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Accordingly, even if we believe one of our product candidates meets the criteria for designation as a Breakthrough Therapy, the FDA may disagree and instead determine not to make such designation.

For example, as to fasedienol for the acute treatment of SAD, the FDA has informed us that designation as a breakthrough therapy cannot be granted at this time.

In any event, the receipt of a Breakthrough Therapy designation for a product candidate may not result in a faster development process, review or approval compared to therapies considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA.

In addition, even if one or more of our product candidates qualify as breakthrough therapies, the FDA may later decide that such product candidates no longer meet the conditions for qualification.

Furthermore, the FDA has granted Fast Track designation for fasedienol for the acute treatment of SAD, for itruvone for the treatment of MDD, and for AV-101 for the adjunctive treatment of MDD and for the treatment of NP, and we may seek Fast Track Designation for some of our other product candidates.

Furthermore, the FDA has granted Fast Track designation for fasedienol for the acute treatment of SAD, for itruvone for the treatment of MDD, and for AV-101 for the adjunctive treatment of MDD and for the treatment of neuropathic pain, and we may seek Fast Track Designation for some of our other product candidates.

If a drug or biologic is intended for the treatment of a serious or life-threatening condition and the therapy demonstrates the potential to address unmet medical needs for this condition, the therapy sponsor may be eligible for Fast Track designation.

Fast Track designation applies to the combination of the product candidate and the specific indication for which it is being studied.

The sponsor of a Fast Track product candidate has opportunities for more frequent interactions with the applicable FDA review team during product development and, once an NDA is submitted, the application may be eligible for priority review.

An NDA submitted for a Fast Track product candidate may also be eligible for rolling review, where the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the application.

The sponsor of a Fast Track product candidate has opportunities for more frequent interactions with the applicable FDA review team during product development and, once a NDA is submitted, the application may be eligible for priority review.

A NDA submitted for a Fast Track product candidate may also be eligible for rolling review, where the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the application.

The FDA has broad discretion whether or not to grant this designation, so even if we believe a particular product candidate is eligible for this designation, there can be no assurance that the FDA would decide to grant it.

The receipt of Fast Track designation for fasedienol for acute treatment of SAD, for itruvone for the treatment of MDD and AV-101 for the adjunctive treatment of MDD and for the treatment of neuropathic pain, and any future receipt of Fast Track designation for other product candidates, does not guarantee a faster development process, review or approval compared to conventional FDA procedures, and receiving a Fast Track designation does not provide assurance of ultimate FDA approval.

The receipt of Fast Track designation for fasedienol for acute treatment of SAD, for itruvone for the treatment of MDD and AV-101 for the

adjunctive treatment of MDD and for the treatment of neuropathic pain, and any future receipt of Fast Track designation for other product candidates, does not guarantee a faster development process, review or approval compared to conventional FDA procedures, and receiving a Fast Track designation does not provide assurance of ultimate FDA approval.

In addition, the FDA may withdraw Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program.

Some of our programs may be partially supported by government grant awards, which may not be available to us in the future or subject us to federal regulations such as “march-in” rights, certain reporting requirements and a preference for U.S.

To fund a portion of our future research and development programs, we may apply for grant funding from governmental agencies.

Some of our programs have been partially supported by government grant awards.

Although we do not currently rely on government funding nor do we have a present intent to seek further grant funding from governmental agencies, should that change, such funding may not be available to us in the future or subject us to federal regulations such as “march-in” rights, certain reporting requirements and a preference for U.S.

Currently, we do not rely on grant funding from government agencies for our development programs, and we do not have a present intent to seek grant funding from government agencies.

While not a current priority, we may apply for grant funding from governmental agencies in the future.

However, funding by these governmental agencies may be significantly reduced or eliminated in the future for a number of reasons.

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or (3) government action is necessary to meet requirements for public use under federal regulations, which we refer to as march-in rights.

government also has the right to take title to these inventions if we fail, or the applicable

licensor fails, to disclose the invention to the government, elect title, and file an application to register the intellectual property within specified time limits.

government also has the right to take title to these inventions if we fail, or the applicable licensor fails, to disclose the invention to the government, elect title, and file an application to register the intellectual property within specified time limits.

In addition, the U.S.

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or that under the circumstances domestic manufacture is not commercially feasible.

As a result of any arrangement involving government funding, and if we make inventions as a result of such funding, intellectual property rights to such discoveries may be subject to the applicable provisions of the Bayh-Dole Act.

As a result of any future arrangement involving government funding, and if we make inventions as a result of such funding, intellectual property rights to such discoveries may be subject to the applicable provisions of the Bayh-Dole Act.

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

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• the federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for the purchase, lease, order, arrangement, or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs.

A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation.

A person or entity

does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation.

Violations are subject to civil fines and criminal penalties for each violation, plus up to three times the remuneration involved, imprisonment, and exclusion from government healthcare programs.

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Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the U.S.

Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products.

Increasingly, third-party payors are requiring that drug companies provide them

with predetermined discounts from list prices and are challenging the prices charged for medical products.

We cannot be sure that reimbursement will be available for any product candidate that we commercialize and, if reimbursement is available, the level of reimbursement.

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At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

Ongoing healthcare legislative and regulatory reform measures may have a material adverse effect on our business and results of operations.

Healthcare legislative and regulatory reform measures may have a material adverse effect on our business and results of operations.

Changes in regulations, statutes or the interpretation of existing regulations could impact our business in the future by requiring, for example, (i) changes to our manufacturing arrangements, (ii) additions or modifications to product labeling, (iii) the recall or discontinuation of our products or (iv) additional record-keeping requirements.

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Congress has indicated that it will continue to seek new legislative measures to control drug costs.

The continuing efforts of the government, insurance companies, managed care organizations and other payers of healthcare services to contain or reduce costs of healthcare may adversely affect:

continuing efforts of the government, insurance companies, managed care organizations and other payers of healthcare services to contain or reduce costs of healthcare may adversely affect:

• the demand for any of our product candidates, if approved;

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• the availability of capital.

In addition, recent and/or future policy changes may create uncertainty for our business.

In its June 2024 decision in Loper Bright Enterprises v.

Raimondo (the Loper Decision), the U.S.

Supreme Court overturned the longstanding Chevron doctrine, under which courts were required to give deference to regulatory agencies’ reasonable interpretations of ambiguous federal statutes.

The Loper Decision could result in additional legal challenges to regulations and guidance issued by federal agencies applicable to our operations, including those issued by the FDA.

Additionally, the Loper Decision may result in increased regulatory uncertainty, inconsistent judicial interpretations and other impacts to the agency rulemaking process.

We cannot predict which additional measures may be adopted or the impact of current and additional measures on the marketing, pricing and demand for our products, which could have a material adverse effect on our business, financial condition and results of operations.

We expect that healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product.

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Furthermore, the use of our product candidates for indications other than those approved by the FDA or comparable foreign regulatory authorities may not effectively treat such conditions.

Any such off-label use of our

product candidates could harm our reputation in the marketplace among physicians and patients.

Any such off-label use of our product candidates could harm our reputation in the marketplace among physicians and patients.

There may also be increased risk of injury to patients if physicians attempt to use our product candidates for these uses for which they are not approved, which could lead to product liability suits that might require significant financial and management resources and that could harm our reputation.

Inadequate funding for the FDA or other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA and comparable foreign regulatory authorities to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes.

Reduction in staffing and/or inadequate funding for the FDA or other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA and comparable foreign regulatory authorities to review and approve new products can be affected by a variety of factors, including staffing levels, government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes.

Average review times at the FDA and comparable foreign regulatory authorities, have fluctuated in recent years as a result.

In addition, government funding of 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, other government agencies and comparable foreign regulatory authorities may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies and comparable foreign regulatory authorities, which would adversely affect our business.

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

Disruptions and personnel turnover, as a result of leadership changes, staff reductions or otherwise, at the FDA, other government agencies and comparable foreign regulatory authorities may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies and comparable foreign regulatory authorities, which would

adversely affect our business.

For example, in recent years, the U.S.

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

If a prolonged government shutdown occurs, including as a result of reaching the debt ceiling, it could significantly impact the ability of the FDA and comparable foreign regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

Separately, in response to the COVID-19 pandemic, the FDA postponed most inspections at domestic and foreign manufacturing facilities from March 2020 until July 2021.

Even though the FDA has since resumed standard inspection operations, and any resurgence of the virus may lead to other inspectional or administrative delays.

If a prolonged government shutdown occurs, or if global health concerns continue to hinder or prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

In addition, the current U.S.

Presidential administration has issued certain policies and Executive Orders directed towards reducing the employee headcount and costs associated with U.S.

administrative agencies, including the FDA, and it remains unclear the degree to which these efforts may limit or otherwise adversely affect the FDA’s ability to conduct routine activities.

If a prolonged government shutdown occurs, or if renewed global health concerns, funding shortages or staffing limitations hinder or prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other such regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

We are subject to evolving global data protection laws and regulations, which may require us to incur substantial compliance costs, and any failure or perceived failure by us to comply with such laws and regulations may harm our business and operations.

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The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that has increased the likelihood of, and risks associated with data breach litigation.

Further, the California Privacy Rights Act (CPRA) generally

went into effect on January 1, 2023, and significantly amends the CCPA.

Further, the California Privacy Rights Act (CPRA) generally went into effect on January 1, 2023, and significantly amends the CCPA.

It imposes additional data protection 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.

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In addition to our operations in the U.S., which may be subject to healthcare and other laws relating to the privacy and security of health information and other personal information, we may seek to conduct future clinical trials in the United Kingdom or the European Economic Area (the EEA) and may become subject to additional European data privacy laws, regulations and guidelines.

We will be subject to the data protection laws of the European Union and United Kingdom in relation to personal data we collect from these territories.

We will be subject to the data protection laws of the EU and United Kingdom in relation to personal data we collect from these territories.

These laws impose additional obligations and risk upon our business, including substantial expenses and changes to business operations that are required to comply with these laws.

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Companies that must comply with the EU GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.

In addition, some of the personal data we process in respect of clinical trial participants is special category or sensitive personal data under the EU GDPR, and subject to additional compliance obligations and to local law derogations.

In addition, some of the personal data we process in respect of clinical trial participants is special category or sensitive personal data under the EU GDPR,

and subject to additional compliance obligations and to local law derogations.

Since the beginning of 2021, after the end of the transition period following the withdrawal of the United Kingdom from the EU (Brexit), we may also be subject to the United Kingdom General Data Protection Regulation and Data Protection Act 2018 (collectively, the UK GDPR) which imposes separate but similar obligations to those under the EU GDPR and comparable penalties, including fines of up to £17.5 million or 4% of a noncompliant company’s global annual revenue for the preceding financial year, whichever is greater.

The subsequent separation of the data protection regimes of these territories mean we are required to comply with separate data protection laws in the European Union and United Kingdom, which may lead to additional compliance costs and could increase our overall risk.

The subsequent separation of the data protection regimes of these territories mean we are required to comply with separate data protection laws in the EU and United Kingdom, which may lead to additional compliance costs and could increase our overall risk.

The EU and UK GDPR (collectively, the GDPR), which deals with the processing of personal data and on the free movement of such data, imposes a broad range of strict requirements, including requirements relating to having lawful bases for processing personal data and transferring such information outside the EEA/UK, including to the U.S., providing details to those individuals regarding the processing of their personal data, keeping personal data secure, having data processing agreements with third parties who process personal data, responding to individuals’ requests to exercise their rights in respect of their personal data, reporting security breaches involving personal data to the competent national data protection authority and affected individuals, appointing data protection officers, conducting data protection impact assessments and record-keeping.

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The GDPR imposes strict rules on the transfer of personal data out of the EEA/UK to countries not regarded by European Commission and the United Kingdom government as providing adequate protection, or the third countries, including the U.S.

and the efficacy and longevity of current transfer mechanisms between the European Economic Area (the EEA) and the U.S.

and the efficacy and longevity of current transfer mechanisms between the EEA and the U.S.

remains uncertain.

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and to other jurisdictions more generally to continue to be subject to enhanced scrutiny by regulators.

As a result, we may have to make certain operational changes and we will have to implement revised standard contractual clauses and other relevant

documentation for existing data transfers within required time frames.

As a result, we may have to make certain operational changes and we will have to implement revised standard contractual clauses and other relevant documentation for existing data transfers within required time frames.

This may lead to additional compliance costs and could increase our overall risk.

Should we conduct future clinical trials in the U.K.

or European Union, we cannot assure you that our efforts to comply with any obligations under European privacy laws will be sufficient.

or EU, we cannot assure you that our efforts to comply with any obligations under European privacy laws will be sufficient.

If we are investigated by a European data protection authority, we may face fines and other penalties.

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Grounds for a validity challenge include alleged failures to meet any of several statutory requirements, including lack of novelty, obviousness, and non-enablement.

Grounds for unenforceability assertions include allegations that someone connected with the prosecution of the patent withheld relevant information from the USPTO or made a misleading statement during prosecution.

Grounds for unenforceability assertions include allegations

that someone connected with the prosecution of the patent withheld relevant information from the USPTO or made a misleading statement during prosecution.

Third parties may also raise similar claims before administrative bodies in the U.S.

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In addition, proceedings to enforce or defend our patents could put our patents at risk of being invalidated, held unenforceable, or interpreted narrowly.

Such proceedings could also provoke third parties to assert claims against us,

including that some or all of the claims in one or more of our patents are invalid or otherwise unenforceable.

Such proceedings could also provoke third parties to assert claims against us, including that some or all of the claims in one or more of our patents are invalid or otherwise unenforceable.

If any patents covering our product candidates are invalidated or found unenforceable, our financial position and results of operations could be materially and adversely impacted.

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We cannot assure that our business, product candidates, and proprietary methods do not or will not infringe the patents or other intellectual property rights of third parties.

Third parties may initiate legal proceedings against us or our licensors or

collaborators, alleging that we or our licensors or collaborators infringe their intellectual property rights.

Third parties may initiate legal proceedings against us or our licensors or collaborators, alleging that we or our licensors or collaborators infringe their intellectual property rights.

In addition, we or our licensors or collaborators may file counterclaims in such proceedings or initiate separate legal proceedings against third parties to challenge the validity or scope of their intellectual property rights, including in oppositions, interferences, reexaminations, inter partes reviews, or derivation proceedings before the U.S.

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Any claim relating to intellectual property infringement that is successfully asserted against us may require us to pay substantial damages, including treble damages and attorney’s fees if we are found to have willfully infringed a third party’s patents, for past use of the asserted intellectual property and royalties and other consideration going forward if we are forced to take a license.

In addition, if any such claim is successfully asserted against us and we are unable to obtain such a license, we may be forced to stop or delay developing, manufacturing, selling or otherwise commercializing one or more our product candidates.

Patent litigation and other types of intellectual property litigation is costly and time-consuming.

We may not have sufficient resources to bring these actions to a successful conclusion.

Even if we are successful in these proceedings, we may incur

substantial costs and divert management time and attention in pursuing these proceedings, which could have a material adverse effect on us.

Even if we are successful in these proceedings, we may incur substantial costs and divert management time and attention in pursuing these proceedings, which could have a material adverse effect on us.

If we are unable to avoid infringing the patent rights of others, we may be required to seek a license, defend an infringement action or challenge the validity of the patents in court, or redesign our products.

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The legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property protection, especially those relating to biotechnology and pharmaceuticals.

could make it difficult for us to stop the infringement of our patents if obtained, or the misappropriation of our other intellectual property rights.

This could make it difficult for us to stop the infringement of our patents if obtained, or the misappropriation of our other intellectual property rights.

For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties under certain circumstances.

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We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful.

Accordingly, our efforts to enforce our intellectual property rights in relevant foreign jurisdictions may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

Accordingly, our efforts to enforce our intellectual property rights in relevant foreign

jurisdictions may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

Some intellectual property that we have licensed may have been discovered through government-funded programs and thus may be subject to federal regulations such as “march-in” rights, certain reporting requirements, and a preference for U.S.

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manufacturers.

Some of the intellectual property rights we have licensed or will license in the future may have been generated through the use of U.S.

Some of the intellectual property rights we have licensed or may license in the future may have been generated through the use of U.S.

government funding and may therefore be subject to certain federal regulations.

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product manufacturers for products covered by such intellectual property.

In the event that we apply for additional U.S.

Although not a current priority, in the event that we apply for additional U.S.

government funding, and we discover compounds or drug candidates as a result of such funding, intellectual property rights to such discoveries may be subject to the applicable provisions of the Bayh-Dole Act.

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patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.

As is the case with other pharmaceutical and biotechnology companies, our success is heavily dependent on intellectual property, particularly patents.

Obtaining and enforcing patents in the biotechnology industry involves both technological and legal complexity and is, therefore, costly, time-consuming, and inherently uncertain.

As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents.

Obtaining and enforcing patents in the biopharmaceutical industry involves both technological and legal complexity and is, therefore, costly, time-consuming, and inherently uncertain.

In addition, the U.S., in recent years, enacted and is currently implementing wide-ranging patent reform legislation:

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The full impact of these decisions is not yet known.

For example, on March 20, 2012, in Mayo Collaborative Services, DBA Mayo Medical Laboratories, et al.

Prometheus Laboratories, Inc.

, the Court held that several claims drawn to measuring drug metabolite levels from patient samples and correlating them to drug doses were not patentable subject matter.

The decision appears to impact diagnostics patents that merely apply a law of nature via a series of routine steps, and it has created uncertainty around the ability to obtain patent protection for certain inventions.

Additionally, on June 13, 2013, in Association for Molecular Pathology v.

Myriad Genetics, Inc ., the Court held that claims to isolated genomic DNA are not patentable but claims to complementary DNA molecules are patent eligible because they are not a natural product.

The effect of the decision on patents for other isolated natural products is uncertain.

Additionally, on March 4, 2014, the USPTO issued a memorandum to patent examiners providing guidance for examining claims that recite laws of nature, natural phenomena, or natural products under the Myriad and Prometheus decisions.

This guidance did not limit the application of Myriad to DNA but, rather, applied the decision to other natural products.

Further, in 2015, in Ariosa Diagnostics, Inc.

Sequenom, Inc ., the Court of Appeals for the Federal Circuit held that methods for detecting fetal genetic defects were not patent-eligible subject matter.

Other more recent court decisions and related USPTO examination guidelines must be considered, particularly as they relate to changes in what types of inventions are eligible for patent protection.

Recent court decisions and related USPTO examination guidelines must be considered, particularly as they relate to changes in what types of inventions are eligible for patent protection.

Foreign patent and intellectual property laws are also evolving and are not predictable as to their impact on the Company and other biopharmaceutical companies.

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• plans for, progress of or results from nonclinical and clinical development activities related to our product candidates;

• the failure of the FDA or other regulatory authority to approve our product candidates;

• the failure of the FDA or other regulatory authority to review or approve our product candidates in a timely manner, or at all;

• announcements of new products, technologies, commercial relationships, acquisitions or other events by us or our competitors;

• the success or failure of other neuroscience therapies;

• the success or failure of other neuroscience therapies in development by other companies;

• regulatory or legal developments in the U.S.

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• general market conditions and overall fluctuations in U.S.

equity markets;

debt and equity markets;

• variations in our quarterly operating results;

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• additions or departures of key personnel;

• discussion of us or our stock price by the press and by online investor communities;

• discussion of us or our stock price by the press and by anonymous or other online investor communities;

• other risks and uncertainties described in these risk factors.

There may be future issuances of shares of preferred stock in the future.

There may be issuances of shares of preferred stock in the future .

Our Restated Articles of Incorporation, as amended (the Articles), permit us to issue up to 10.0 million shares of preferred stock.

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• the timing and success or failure of clinical trials for our product candidates or competing product candidates, or any other change in the competitive landscape of our industry,

• our ability to successfully recruit and retain subjects for clinical trials, and any delays caused by difficulties in such efforts;

• our ability to successfully recruit, enroll and retain subjects who meet our eligibility criteria for participation in our clinical trials, and any delays caused by difficulties in such efforts;

• the risk/benefit profile, cost and reimbursement policies with respect to our product candidates, if approved, and existing and potential future therapeutics that compete with our product candidates;

• our ability to obtain marketing approval for our product candidates and the timing and scope of any such approvals we may receive;

• the timing and cost of, and level of investment in, research and development activities relating to our product candidates, which may change from time to time;

• the cost of manufacturing our product candidates, which may vary depending on the quantity of production and the terms of our agreements with manufacturers;

• the timing and cost of, and level of investment in, research and development and commercialization activities relating to our product candidates, which may change from time to time;

• the cost of manufacturing our product candidates, which may vary depending on the quantity of production and the terms of our agreements with contract manufacturers;

• our ability to attract, hire and retain qualified personnel;

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• the changing and volatile U.S.

and global economic environments, including the impact of inflation and rising interest rates, and domestic or international political instability;

and global economic and political environments, including the impact of inflation and rising interest rates, and domestic or international political instability;

• future accounting pronouncements or changes in our accounting policies.

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Historically, securities class action litigation has often been brought against companies following periods of volatility in the market price of a company’s securities.

This type of litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources, which could harm our business, operating results, or financial condition.

For example, purported stockholders of the Company filed a lawsuit in the United States District Court for the Northern District of California against the Company and certain of our executive officers, the members of our Board and certain other parties, claiming, under the U.S.

federal securities laws and certain California civil statutes, among other things, allegedly false or misleading statements, and alleged omissions of material facts, related to our public disclosures.

We believe the claims are without merit and intend to vigorously defend all claims.

This type of litigation could result in substantial costs and a diversion of management’s attention and resources, which could harm our business, operating results, or financial condition.

Additionally, the dramatic increase in the cost of directors’ and officers’ liability insurance may cause us to opt for lower overall policy limits or to forgo insurance that we may otherwise rely on to cover significant defense costs, settlements, and damages awarded to plaintiffs.

Our issuance of additional capital stock in connection with financings, acquisitions, investments, our stock incentive plans or otherwise will dilute all other stockholders.

We expect to issue additional capital stock in the future that will result in dilution to all other stockholders.

Our issuance of additional capital stock in connection with financings, acquisitions, investments, our stock incentive plans or otherwise may, and likely will significantly dilute all other stockholders.

We expect to issue additional capital stock in the future that may, and likely will result in substantial dilution to all of our stockholders.

We expect to grant equity awards to employees and directors under our stock incentive plans.

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As part of our business strategy, we may acquire or make investments in complementary companies, products, or technologies and issue equity securities to pay for any such acquisition or investment.

Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value of our common stock to decline.

Any such issuances of additional capital stock will cause stockholders to experience significant dilution of their ownership interests and the per share value of our common stock to decline.

Because we have no current plans to pay cash dividends on our common stock, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.

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In the future, we may attempt to obtain financing or to further increase our capital resources by issuing additional shares of our common stock or offering debt or other equity securities, including commercial paper, medium-term notes, senior or subordinated notes, debt securities convertible into equity or shares of preferred stock.

Future acquisitions could require substantial additional capital in excess of cash from operations.

We would expect to obtain the capital required for acquisitions through a combination of additional issuances of equity, corporate indebtedness and/or cash from operations.

Issuing additional shares of our common stock or other equity securities or securities convertible into equity may dilute the economic and voting rights of our existing stockholders or reduce the market price of our common stock or both.

Issuing additional shares of our common stock or other equity securities or securities convertible into equity will dilute the economic and voting rights of our existing stockholders and may reduce the market price of our common stock or both.

Upon liquidation, holders of such debt securities and preferred shares, if issued, and lenders with respect to other borrowings would receive a distribution of our available assets prior to the holders of our common stock.

Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity securities issuable upon conversion.

Preferred shares, if issued, could have a preference with respect to

liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our common stock.

Preferred shares, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our common stock.

Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing and nature of our future offerings.

General Risk Factors

Adverse market or macroeconomic conditions or market volatility resulting from global economic developments, including those affecting the financial services industry, could adversely affect our business operations and our financial condition and results of operations.

Adverse market or macroeconomic conditions or market volatility resulting from global economic developments, political unrest, high inflation, rising interest rates, the post-COVID environment or other factors, could materially and adversely affect our business operations.

Adverse market or macroeconomic conditions or market volatility resulting from global economic and political developments, including those affecting the financial services industry, could adversely affect our business operations and our financial condition and results of operations.

Adverse market or macroeconomic and political conditions or market volatility resulting from global economic developments, political activity and uncertainty, high inflation, rising interest rates, the post-COVID environment or other factors, could materially and adversely affect our business operations.

For instance, 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 was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (the FDIC) as receiver.

Similarly, on March 12, 2023, Signature Bank Corp.

and Silvergate Capital Corp.

were each swept into receivership, and uncertainty remains over liquidity concerns in the broader financial services industry.

We may maintain cash balances at third-party financial institutions in excess of the FDIC standard insurance limit.

Although the U.S.

Department of Treasury, FDIC and Federal Reserve Board announced a program to provide up to $25.0 billion of loans to financial institutions secured by certain of such government securities held by financial institutions, widespread demands for customer withdrawals or other liquidity needs of financial institutions may exceed the capacity of such program, and 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 such banks or financial institutions, or that they would do so in a timely fashion.

These events could result in a variety of material and adverse impacts on our current and projected business operations and our financial condition and results of operations, including, but not limited to, the following:

• delayed access to deposits or other financial assets or the uninsured loss of deposits or other financial assets;

• potential or actual breach of statutory, regulatory or contractual obligations, including obligations that require us to maintain letters of credit or other credit support arrangements;

• termination of cash management arrangements and/or delays in accessing or actual loss of funds subject to cash management arrangements.

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

These events could result in a variety of material and adverse impacts on our current and projected business operations and our financial condition and results of operations.

In addition, any deterioration in the macroeconomic economy or financial services industry could lead to losses or defaults by our partners, vendors or suppliers, 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 partner may fail to make payments when due, default under their agreements with us, become insolvent or declare bankruptcy, or a supplier may determine that it will no longer deal with us as a customer.

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As of March 31, 2025, we had U.S.

federal net operating loss carryforwards totaling $208.0 million, all of which have an indefinite carryforward period.

federal net operating loss carryforwards totaling $229.2 million.

Federal net operating loss carryforwards of approximately $82.1 million generated through our fiscal year ended March 31, 2018 will expire in our fiscal years ending March 31, 2025 through March 31, 2038.

Federal net operating loss carryforwards of approximately $125.2 million generated in fiscal years ending after March 31, 2018 will carry forward indefinitely.

As of March 31, 2024, we had state net operating loss carryforwards totaling $65.8 million, which expire at various dates bet ween 2029 and 2044 .

Federal net operating loss carryforwards of approximately $147.1 million generated in fiscal years ending after March 31, 2018 will carry forward indefinitely, but are subject to an 80% taxable income limitation.

As of March 31, 2025, we had state net operating loss carryforwards totaling $66.6 million, which expire at various dates between 2029 and 2045.

As of March 31, 2025, we also had U.S.

federal and state research and development tax credit carryforwards of $3.3 million and $1.6 million, respectively, which begin to expire in 2029 for fe deral purposes, state credits do no expire.

federal and state research and development tax credit carryforwards of $7.6 million and $2.0 million, respectively.

The federal tax credits will expire at various dates beginning with our fiscal year ending March 31, 2029, unless previously utilized.

The state tax credits do not expire and will carry forward indefinitely until utilized.

The net operating losses which are limited in life and tax credit carryforwards could expire unused and be unavailable to offset future income tax liabilities.

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Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations.

In addition, any testing we conduct in connection with Section 404 of the Sarbanes-Oxley Act of 2022, as amended (the Sarbanes-Oxley Act), or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our consolidated financial statements or identify other areas for further attention or improvement.

In addition, any testing we conduct in connection with Section 404 of the Sarbanes-Oxley Act, or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our consolidated financial statements or identify other areas for further attention or improvement.

Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock.

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Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our common stock.

Securities research analysts may establish and publish their own periodic projections for us.

These projections may vary widely and may not accurately predict the results we actually achieve.

Our share price may decline if our actual results do not match the projections of these securities research analysts.

Independent securities research analysts may establish and publish their own periodic analysis of and projections relating to our operation and prospects.

These analyses and projections may vary widely and may not accurately predict the results we actually achieve.

Our share price may decline if our actual results do not match the analyses and projections of these securities research analysts.

Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our share price could decline.

If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, our share price or trading volume could decline.

There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.

If Nasdaq delists our shares of common stock from trading on its exchange for failure to meet Nasdaq’s listing standards, we and our stockholders could face significant material adverse consequences including:

Although we are currently in compliance with all applicable Nasdaq continued listing standards, there can be no assurance that we will be able to continue to comply with such Nasdaq continued listing standards in the future.

If, in the future, Nasdaq delists our shares of common stock from trading on its exchange for failure to meet Nasdaq’s continued listing standards, we and our stockholders could face significant material adverse consequences including:

• a limited availability of market quotations for our securities;

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• the volume of shares of our common stock available for public sale;

• general economic and political conditions such as recessions, rising interest rates, inflation, fuel prices, foreign currency fluctuations, international tariffs, boycotts, curtailment of trade and other business restrictions, social, political and economic risks, natural disasters and acts of war or terrorism, such as the conflicts involving Ukraine and Russia, or Israel and its surrounding regions.

• general economic and political conditions such as recessions, rising or unchanged interest rates, inflation, fuel prices, foreign currency fluctuations, international tariffs, boycotts, curtailment of trade and other business restrictions, social, political and economic risks, natural disasters and acts of war or terrorism, such as the conflicts involving Ukraine and Russia, or Israel and its surrounding regions.

These market and industry factors may materially reduce the market price of shares of our common stock regardless of our operating performance.

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