CATX US Equity☆

ITEM 1A – RISK FACTORS

Our business is subject to substantial risks and uncertainties. The occurrence of any of the following risks and uncertainties, either alone or taken together, could materially and adversely affect our business, financial condition, results of operations or prospects. In these circumstances, the market price of our common shares could decline and you may lose all or part of your investment. The risks and uncertainties described below are not the only ones we face. Risks and uncertainties of general applicability and additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition, results of operations or prospects.

Risks Related to Our Business, Financial Results and Need for Additional Capital

We are a clinical-stage biopharmaceutical company and has a limited operating history upon which to base an investment decision. Since the Viewpoint merger in 2023, we have engaged primarily in research and development activities of VMT-α-NET, VMT01 and our other program candidates, have not generated any revenue from product sales other than our discontinued brachytherapy business and have incurred significant net losses. We have not received regulatory approval to market any of our current program candidates. The successful commercialization of any of our program candidates will require us to perform a variety of functions, including:

● completing pre-clinical development and clinical trials;

● obtaining regulatory and marketing approval;

● conducting sales and marketing activities;

Our operations since the Viewpoint merger in 2023 have been limited to organizing and staffing, acquiring, developing and securing the proprietary rights for, and undertaking preclinical development and early-stage clinical trials for VMT-α-NET, VMT01 and our other program candidates. These operations provide a limited basis for our stockholders and prospective investors to assess our ability to complete development of or commercialize VMT-α-NET, VMT01 or any other program candidates given the risks and uncertainties frequently encountered in new and rapidly evolving fields and the advisability of investing in our securities.

Even if one or more of the program candidates is approved for marketing, we anticipate incurring significant costs associated with commercialization of such program candidate. Portions of our current pipeline of program candidates have been in-licensed from third parties, which make the commercial sale of such in-licensed products potentially subject to additional royalty and milestone payments to such third parties. We will also have to continue to acquire manufacturing capabilities to continue manufacturing, development and potential commercialization of our program candidates. Additionally, if we are not able to gain market acceptance for our program candidates or the market is too small or competitive to generate revenue from the sale of any approved products, we may never become profitable.

We will require substantial additional capital to fund our operations. Additional funds may be dilutive to shareholders or impose operational restrictions. Further, if additional capital is not available, we may need to delay, limit or eliminate our research, development and commercialization programs and modify our business strategy. Our principal sources of liquidity are cash and cash equivalents, which were $9.2 million as of December 31, 2023. We believe that our cash and cash equivalents as of December 31, 2023 and the cash we raised through the Lantheus Investment Agreement, the January 2024 Public Offering, and the March 2024 Private Placement will be sufficient to fund our operations and capital investments into 2026. However, changing circumstances may cause us to consume capital faster than we currently anticipate, and we may need to spend more money than currently expected because of such circumstances. Within the next several years, substantial additional funds will be required to continue with the active development of our pipeline program candidates and technologies. In particular, our funding needs may vary depending on a number of factors including:

We will seek to obtain funding to maintain and advance our business from a variety of sources including equity financings, debt financings, licensing agreements, partnerships, government grants and contracts, and other strategic transactions and funding opportunities. There can be no assurance that we will be able to complete any such transaction on acceptable terms or otherwise.

If we are able to raise additional capital through the issuance of equity securities, the percentage ownership of our current shareholders will be reduced. In addition, we may issue equity as part of the consideration to our licensors, to compensate consultants or to settle outstanding payables, all of which could cause our shareholders to experience additional dilution in net book value per share. Any such additional equity securities may have rights, preferences and privileges senior to those of the holders of our common shares.

Debt financing, if available, will result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any debt financing or additional equity that we raise may contain terms, such as liquidation and other preferences, which are not favorable to us or our existing shareholders. If we raise additional funds through corporate collaborations, partnerships or other strategic transactions, it may be necessary to relinquish valuable rights to our program candidates, our technologies or future revenue streams or to grant licenses or sell assets on terms that may not be favorable to us.

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If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we will need to curtail and reduce our operations and costs, and modify our business strategy which may require us to, among other things:

● cease operations.

We have incurred losses in nearly every year since our inception, and we anticipate that we will not achieve profits for the foreseeable future. To date, we have incurred losses each fiscal year since inception through the year ended December 31, 2023 and have not received any revenues other than from our brachytherapy business, which is expected to be divested in the first half of 2024. From inception to December 31, 2023, we have an accumulated deficit of approximately $152.4 million. Investment in drug development is highly speculative because it entails substantial upfront capital expenditures and significant risk that a program candidate will fail to gain regulatory approval or become commercially viable. We continue to incur significant research, development and other expenses related to our ongoing operations, including development of our program candidates. We do not expect to achieve profits until such time as product sales, milestone payments and royalty payments, if any, generate sufficient revenues to fund our continuing operations. We cannot predict if we will ever achieve profitability and, if we do, we may not be able to remain consistently profitable or increase our profitability.

We expect to continue to incur significant expenses and operating losses for the foreseeable future. We anticipate that our expenses will continue to be significant if and as we:

● continue or expand our licensing arrangements with our licensing partners;

● change or add additional manufacturers or suppliers;

● seek to identify and validate additional program candidates;

● acquire or in-license other program candidates and technologies;

● maintain, protect and expand our intellectual property portfolio;

● attract and retain skilled personnel;

● experience any delays or encounter issues with any of the above.

The net losses we incur may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance.

Risks Related to Our Business and Industry

Coverage and adequate reimbursement may not be available for our products, if commercialized, which could make it difficult for us to sell our products profitably. Market acceptance and sales of any products that we commercialize will depend in part on the extent to which reimbursement for these products and related treatments will be available from third-party payors, including government health administration authorities and private health insurers. Third-party payors decide which drugs they will pay for and establish reimbursement levels. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies. However, decisions regarding the extent of coverage and amount of reimbursement to be provided for each of our products will be made on a plan-by-plan basis. One payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage, and adequate reimbursement, for the product. Additionally, a third-party payor’s decision to provide coverage for a drug does not imply that an adequate reimbursement rate will be approved. Each plan determines whether or not it will provide coverage for a drug, what amount it will pay the manufacturer for the drug, and on what tier of its formulary the drug will be placed. The position of a drug on a formulary generally determines the copayment that a patient will need to make to obtain the drug and can strongly influence the adoption of a drug by patients and physicians. Patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our products.

A primary trend in the United States healthcare industry and elsewhere is cost containment. Third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. We cannot be sure that coverage and reimbursement will be available for any product that we commercialize and, if reimbursement is available, what the level of reimbursement will be. Inadequate coverage and reimbursement may impact the demand for, or the price of, any product for which we obtain marketing approval. If coverage and adequate reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize any program candidates that we develop.

Additionally, there have been a number of legislative and regulatory proposals to change the healthcare system in the United States and in some jurisdictions outside the United States that could affect our ability to sell any future products profitably. These legislative and regulatory changes may negatively impact the reimbursement for any future products, following approval.

Our success in international markets also depends upon the eligibility of our product for coverage and reimbursement through government-sponsored healthcare payment systems and third-party payors. Reimbursement practices vary significantly by country. Many international markets have government-managed insurance systems that control reimbursement for our new product and procedures. Other foreign markets have both private insurance systems and government-managed systems that control reimbursement for our new product and procedures. Market acceptance of our product may depend on the availability and level of coverage and reimbursement in any country within a particular time. In addition, healthcare cost containment efforts similar to those we face in the United States are prevalent in many of the other countries in which we intend to sell our product and these efforts are expected to continue.

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Our program candidates are in early stages of development and must go through clinical trials, which are very expensive, time consuming and difficult to design and implement. The outcomes of clinical trials are uncertain, and delays in the completion of or the termination of any clinical trial of our program candidates could harm our business, financial condition and prospects. Our research and development programs are at an early stage of development. We must demonstrate our program candidates’ safety and efficacy in humans through extensive clinical testing, which is expensive and time consuming and requires specialized knowledge and expertise. Clinical trials are also expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. The clinical trial process is also time consuming, and the outcome is not certain. We estimate that clinical trials of our program candidates will take multiple years to complete. Failure can occur at any stage of a clinical trial, and we could encounter problems that cause us to abandon or repeat clinical trials.

Clinical trials of our program candidates in the United States, must be performed under an Investigational New Drug ("IND") application authorized by the United States Food and Drug Administration ("FDA.") The central focus of an IND submission is on the general investigational plan and the protocol(s) for clinical studies. The IND also includes results of animal studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the program. An IND must become effective before human clinical trials may begin. Clinical trials involve the administration of an investigational program to human subjects under the supervision of qualified investigators in accordance with good clinical practices ("GCPs"), which include the requirement that all research subjects provide their informed consent for their participation in any clinical study. Clinical trials are conducted under protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. A separate submission to the existing IND must be made for each successive clinical trial conducted during program development and for any subsequent protocol amendments. Furthermore, an independent institutional review board ("IRB") for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial and its informed consent form before the clinical trial begins at that site and must monitor the study until completed. Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives. Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy. There are also requirements governing the reporting of ongoing clinical studies and clinical study results to public registries.

We currently have two ongoing clinical trials in Phase 1/2a for VMT-α-NET and VMT01. Both trials are registered with ClinicalTrials.gov and have completed their first dose cohorts and are now enrolling in their second dose cohorts. Our lead program candidate, VMT-α-NET, has also received a Fast Track designation, which allows for rapid communication with the FDA on clinical trial development plans and findings. The approved Phase 1/2a trial for VMT-α-NET is entitled “A Phase 1/2a First-in-Human Study of [212Pb]VMT-α-NET Targeted Alpha-Particle Therapy for Advanced SSTR2 Positive Neuroendocrine Tumors.” The approved Phase 1/2a trial for our second program candidate, VMT01, is entitled “A Phase 1/2a, First-In-Human, Multi-Center Dose Escalation and Dose Expansion Study of [203/212Pb]VMT01 Receptor-Targeted, Image Guided Alpha-Particle Therapy in Patients with Previously Treated Unresectable or Metastatic Melanoma.” Both trials are multi-center.

As with most pharmaceutical products, use of our program candidates could be associated with side effects or adverse events, which can vary in severity and frequency. Side effects or adverse events associated with the use of our program candidates may be observed at any time, including in clinical trials or when a program is commercialized. Undesirable side effects caused by our program candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other foreign authorities. Results of our trials could reveal a high and unacceptable severity and prevalence of side effects, toxicity or other safety issues, and could require us to perform additional studies or halt development or sale of these program candidates or expose us to product liability lawsuits that will harm our business. In such an event, we may be required by regulatory agencies to conduct additional animal or human studies regarding the safety and efficacy of our program candidates that we have not planned or anticipated or our studies could be suspended or terminated, and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny or withdraw approval of our program candidates for any or all targeted indications. There can be no assurance that we will resolve any issues related to any product-related adverse events to the satisfaction of the FDA or any other regulatory agency in a timely manner, if ever, which could harm our business, prospects and financial condition.

We obtain our supply of Thorium-228 from a single supplier. Our alpha-particle therapies require Thorium-228, which is a radioactive metallic chemical. We have executed an Isotope and Technical Service Order Form dated January 1, 2021, for the purchase of Thorium-228 with the U.S. Department of Energy. This is currently our sole source of Thorium-228. Reliance on any single supplier increases the risks associated with obtaining raw materials. Should the agreement with the U.S. Department of Energy be cancelled or terminated for any reason, we may be unable to obtain an alternative supply of Thorium-228 at a comparable cost, which may have a material adverse impact on our ability to further develop or produce our alpha-particle therapies.

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 their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the trial until its conclusion. The enrollment of patients depends on many factors, including:

● the patient eligibility criteria defined in the protocol;

● the size of the patient population;

● the design of the trial;

● our ability to obtain and maintain patient consents; and

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Our clinical trials will compete with other clinical trials for program candidates that are in the same therapeutic areas as our program candidates. This competition will reduce the number and types of patients and qualified clinical investigators available to us, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors or clinical trial sites may not allow us to conduct our clinical trial at such site if competing trials are already being conducted there. Since the number of qualified clinical investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials in such clinical trial site. We may also encounter difficulties finding a clinical trial site at which to conduct our trials.

Delays in patient enrollment may result in increased costs or may affect the timing or outcome of our planned clinical trials, which could prevent completion of these clinical trials and adversely affect our ability to advance the development of our program candidates and may result in additional net losses.

Because the results of preclinical studies and early clinical trials are not necessarily predictive of future results, any program candidate we advance into clinical trials may not have favorable results in later clinical trials, if any, or receive regulatory approval. Pharmaceutical development has inherent risk. We will be required to demonstrate through well-controlled clinical trials that our program candidates are effective with a favorable benefit-risk profile for use in their target indications before we can seek regulatory approvals for their commercial sale. Success in pre-clinical studies or early clinical trials does not mean that later clinical trials will be successful, as program candidates in later-stage clinical trials may fail to demonstrate sufficient safety or efficacy despite having progressed through initial clinical testing, and clinical data are often susceptible to varying interpretations or analyses. We also may need to conduct additional clinical trials that are not currently anticipated. Companies frequently suffer significant setbacks in advanced clinical trials, even after earlier clinical trials have shown promising results.

Delays in the commencement or completion of our clinical trials could result in increased costs and delay our ability to pursue regulatory approval and commercialization of our program candidates. Although we have commenced Phase 1/2a clinical trials for VMT-α-NET and VMT01 in 2023, the completion of clinical trials can be delayed for a variety of reasons, including:

● identifying, recruiting and training suitable clinical investigators;

● inability to identify and maintain a sufficient number of trial sites;

● failure of CROs to meet their contractual obligations or deadlines;

● the need to modify a trial protocol;

● unforeseen safety issues;

● emergence of dosing issues;

● lack of effectiveness data during clinical trials;

● changes in the standard of care of the indication being studied;

● inability to monitor subjects adequately during or after treatment;

● changes in governmental regulations or administrative action; and

● availability of funds.

Any delays in the commencement of our clinical trials will delay our ability to pursue regulatory approval for our program candidates. In addition, many of the factors that cause, or lead to, a delay in the commencement of clinical trials may also ultimately lead to the denial of regulatory approval of a program candidate.

We may be required to suspend, repeat or terminate our clinical trials if they are not conducted in accordance with regulatory requirements, the results are negative or inconclusive, or the trials are not well designed. Regulatory agencies, IRBs or data safety monitoring boards may at any time recommend the temporary or permanent discontinuation of our clinical trials or request that we cease using investigators in the clinical trials if they believe that the clinical trials are not being conducted in accordance with applicable regulatory requirements, or that they present an unacceptable safety risk to participants. Clinical trials must be conducted in accordance with current Good Clinical Practices ("cGMPs") or other applicable foreign government guidelines governing the design, safety monitoring, quality assurance and ethical considerations associated with clinical studies. Clinical trials are subject to oversight by the FDA, other foreign governmental agencies and IRBs at the study sites where the clinical trials are conducted. In addition, clinical trials must be conducted with program candidates produced in accordance with applicable cGMPs, which are the FDA’s regulations governing the design, monitoring and control of manufacturing processes and facilities. In the EU, clinical trials should be conducted in accordance with guidelines on good clinical practices and in accordance with the Clinical Trials Regulation (“Regulation”), that repealed and replaced the former Clinical Trials Directive. Prior to the Regulation, clinical trial sponsors had to submit clinical trial applications separately to national competent authorities and ethics committees in each country to gain regulatory approval to run a clinical trial. Under the Clinical Trials Regulation, sponsors must submit one application for a new trial to the online Clinical Trials Information System for approval to run a trial in several European countries. Prior to authorization, the clinical trial shall be subject to ethics review performed by an ethics committee, in accordance with the law of the concerned EU member state.

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Clinical trials may be suspended by the FDA, other foreign governmental agencies or us for various reasons, including:

● deficiencies in the clinical trial operations or trial sites;

● the program candidate may have unforeseen adverse side effects;

● deficiencies in the trial design necessary to demonstrate efficacy;

If we elect or are forced to suspend or terminate a clinical trial for VMT-α-NET, VMT01 or of any other program candidates, the commercial prospects for that program candidate will be harmed and our ability to generate product revenue from that program candidate may be delayed or eliminated. Furthermore, any of these events could prevent us or our partners from achieving or maintaining market acceptance of the affected program candidate and could substantially increase the costs of commercializing our program candidates and impair our ability to generate revenue from the commercialization of these program candidates, either by us or by our collaboration partners.

The approval processes of regulatory authorities are lengthy, time consuming, expensive and inherently unpredictable; if we experience unanticipated delays or are unable to obtain approval for our program candidates from applicable regulatory authorities, we will not be able to market and sell those program candidates in those countries or regions and our business will be substantially harmed. The time required to obtain approval by the FDA in the United States and by comparable health authorities in foreign markets, including Health Canada's Therapeutic Products Directorate, or the TPD, and European Medicines Agency, or the EMA, is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the type, complexity and novelty of the programs involved and in substantial discretion of the regulatory authorities. Our ability to obtain marketing approval for these program candidates depends on obtaining the final results of required clinical testing and non-clinical testing, including characterization of the manufactured components of our program candidates and validation of our manufacturing processes, that meet applicable regulatory standards. We have not submitted an NDA or similar filing or obtained regulatory approval for any program candidate in any jurisdiction, and it is possible that none of our existing program candidates or any program candidates we may seek to develop in the future will ever obtain regulatory approval.

The FDA, the TPD and/or the EMA can delay, limit or deny approval of VMT-α-NET, VMT01 and our other program candidates for many reasons, including any one or more of the following:

The time and expense of the approval process, as well as the unpredictability of clinical trial results and other contributing factors, may result in our failure to obtain regulatory approval to market, in one or more jurisdictions, VMT-α-NET and VMT01 or future program candidates, which would significantly harm our business, results of operations and prospects.

We intend to rely on third-party collaborators to market and sell our programs, and those third-party collaborators may not have the resources to pursue approvals, which in turn could severely limit our potential markets and ability to generate revenue. In order to market and sell our programs in any jurisdiction, we or our third-party collaborators must obtain separate marketing approvals in that jurisdiction and comply with its regulatory requirements. The approval procedure can vary drastically among countries, and each jurisdiction may impose different testing and other requirements to obtain and maintain marketing approval. Further, the time required to obtain those approvals may differ substantially among jurisdictions. Approval by the FDA or an equivalent foreign authority does not ensure approval by regulatory authorities in any other countries or jurisdictions. As a result, the ability to market and sell a program candidate in more than one jurisdiction can involve significant additional time, expense and effort to undertake separate approval processes, and could subject us and our collaborators to the numerous and varying post-approval requirements of each jurisdiction governing commercial sales, manufacturing, pricing and distribution of VMT-α-NET and VMT01 and our other program candidates. We or any third parties with whom we may collaborate may not have the resources to pursue those approvals, and we or they may not be able to obtain any approvals that are pursued. The failure to obtain marketing approval for VMT-α-NET, VMT01 and our other program candidates in foreign jurisdictions could severely limit our potential markets and our ability to generate revenue.

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In addition, even if we were to obtain regulatory approval in one or more jurisdictions, regulatory authorities may approve VMT-α-NET, VMT01 and our other program candidates for fewer or more limited indications than we request, may not approve the prices we may propose to charge for our programs, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a program candidate with labeling that does not include the claims necessary or desirable for the successful commercialization of that program candidate. Any of the foregoing circumstances could materially harm the commercial prospects for VMT-α-NET, VMT01 and our other program candidates.

Our program candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of the approved labeling, or result in significant negative consequences following marketing approval, if any. Results of current and future clinical trials of VMT-α-NET, VMT01 and our other program candidates could reveal a high and/or unacceptable severity and frequency of these adverse effects. In such an event, our trials could be suspended or terminated, and the FDA or comparable foreign regulatory authorities could order us to cease further development of, or deny approval of, our program candidates for any or all targeted indications. Further, any observed drug-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. This, in turn, could prevent us from commercializing the affected program candidate and generating revenues from our sales. We have not yet completed testing of any of our program candidates for the treatment of the indications for which we intend to seek product approval in humans, and we currently do not know the extent of adverse events, if any, that will be observed in patients who receive any of our program candidates. If any of our program candidates cause unacceptable adverse events in clinical trials resulting in a clinical hold, we cannot give any assurance that we will be able to resolve any future clinical holds imposed by the FDA or other regulatory authorities outside of the United States on a timely basis or at all.

Additionally, if VMT-α-NET, VMT01 and our other program candidates receive marketing approval, and we or others later identify undesirable side effects caused by our programs, a number of potentially significant negative consequences could result, including:

● regulatory authorities may withdraw approvals of such program;

● we could be sued and held liable for harm caused to patients; and

● our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of the particular program, if approved, and could significantly harm our business, results of operations and prospects.

If we are unable to execute our sales and marketing strategy for our program candidates, if commercialized, and are unable to gain market acceptance, we may be unable to generate sufficient revenue to sustain our business. We are a clinical-stage biopharmaceutical company and have yet to begin to generate revenue from VMT-α-NET, VMT01 and our other program candidates. Our program candidates are in an early stage of clinical development, and, if we obtain marketing approval for any of our programs in the future, we anticipate this would not occur for several years, if at all.

Although we believe that VMT-α-NET and VMT01 represent a promising commercial opportunity, it may never gain significant market acceptance and therefore may never generate substantial revenue or profits for us. We will need to establish a market for VMT-α-NET, VMT01 and our other program candidates and build that market through physician education, awareness programs and the publication of clinical data. Gaining acceptance in medical communities requires, among other things, publication in leading peer-reviewed journals of results from our studies. The process of publication in leading medical journals is subject to a peer review process and peer reviewers may not consider the results of our studies sufficiently novel or worthy of publication. Failure to have our studies published in peer-reviewed journals could limit the adoption of VMT-α-NET, VMT01 or our other program candidates. Our ability to successfully market our program candidates that we may develop will depend on numerous factors, including:

● whether our current or future partners support our offerings;

● the success of the sales force and marketing effort;

Because we license some of our program candidates from third parties, any dispute with our licensors or non-performance by us or by our licensors may adversely affect our ability to develop and commercialize the applicable program candidates. Some of our program candidates, including VMT-α-NET and VMT01, including related intellectual property rights, were licensed from third parties. Under the terms of our license agreements, the licensors generally have the right to terminate such agreements in the event of a material breach by us. Our licenses require us to make annual, milestone or other payments prior to commercialization of any program and our ability to make these payments depends on our ability to generate cash in the future. These agreements generally require us to use diligent and reasonable efforts to develop and commercialize the program candidate.

If there is any conflict, dispute, disagreement or issue of nonperformance between us and our licensing partner regarding our rights or obligations under the license or other agreements, including any conflict, dispute or disagreement arising from our failure to satisfy payment obligations under such agreement or question as to which party owns newly developed product(s), our ability to develop and commercialize the affected program candidate may be adversely affected. Any loss of our rights under our license agreements could delay or completely terminate our program development efforts for the affected program candidate, and we may not obtain the revenues anticipated.

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We may form or seek strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such alliances or licensing arrangements. From time to time, we may form or seek strategic alliances, create joint ventures or collaborations, or enter into additional licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts with respect to VMT-α-NET, VMT01 and our other program candidates and any future program candidates that we may develop. Any of these relationships may require us to incur nonrecurring and other charges, increase our near and long-term expenditures, or disrupt our management and business. These relationships also may result in a delay in the development of VMT-α-NET, VMT01 and our other program candidates if we become dependent upon the other party and such other party does not prioritize the development of our program candidates relative to our other development activities. In addition, we face significant competition in seeking appropriate strategic partners and the negotiation process is time consuming and complex. Moreover, we may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for our program candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our program candidates as having the requisite potential to demonstrate safety and efficacy. If we license programs or businesses, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture. We cannot be certain that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction. We rely completely on third parties to manufacture our preclinical and clinical pharmaceutical supplies and expect to continue to rely on third parties to produce commercial supplies of our program candidates, and our dependence on third-party suppliers could adversely impact our business.

We may rely partially on third parties to manufacture our clinical pharmaceutical supplies and could continue to rely on third parties to produce commercial supplies of any approved program candidate, and our dependence on third-party suppliers could adversely impact our business. We may not have the resources or capacity to commercially manufacture any of our proposed programs, if approved, and may be dependent upon third-party manufacturers. Our potential reliance on third-party manufacturers may expose us to risks, such as difficulties in manufacturing or obtaining from third parties sufficient quantities of a product candidate for use in clinical trials or commercial use that meet internal and regulatory standards. Our possible dependence on third parties to manufacture and supply us with clinical trial materials and any approved programs may adversely affect our ability to develop and commercialize our programs on a timely basis or at all.

We rely on third parties to conduct our clinical trials and if these third parties do not meet their deadlines or otherwise conduct the trials as required, our clinical development programs could be delayed or unsuccessful and we may not be able to obtain regulatory approval for or commercialize our program candidates when expected or at all. We do not have the ability to conduct all aspects of our preclinical testing or clinical trials themselves. We use CROs to conduct our planned clinical trials and will rely upon such CROs, as well as medical institutions, clinical investigators, and consultants, to conduct our trials in accordance with our clinical protocols pursuant to contracts with such entities. Our CROs, investigators and other third parties will play a significant role in the conduct of these trials and the subsequent collection and analysis of data from the clinical trials.

There is no guarantee that any CROs, investigators and other third parties upon which we rely for administration and conduct of our clinical trials will devote adequate time and resources to such trials or perform as contractually required, and therefore, we cannot be assured that these third parties will adequately perform all of their contractual obligations to us. If any of these third parties fail to meet expected deadlines, compromise the quality or accuracy of clinical trial data by failing to adhere to its clinical protocols or otherwise perform in a substandard manner, such as by failing to follow legal or regulatory requirements, our clinical trials may be extended, delayed, or terminated. If any of our relationships with these third parties terminate, we may not be able to enter into arrangements with alternative third parties on commercially reasonable terms or at all. If any of its clinical trial sites terminate for any reason, we may experience the loss of follow-up information on patients enrolled in its ongoing clinical trials unless we are able to transfer the care of those patients to another qualified clinical trial site. Switching or adding additional third-party service providers involves additional cost and requires management time and focus. In addition, there is a natural transition period when a new third-party service provider begins work. As a result, delays may occur, which can materially impact our ability to meet our desired development timelines.

In addition, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive cash or equity compensation in connection with such services. If these relationships and any related compensation result in perceived or actual conflicts of interest, the integrity of the data generated at the applicable clinical trial site may be jeopardized.

We may seek orphan drug designation, rare pediatric disease designation, or other FDA designations, but may not receive such designation. Even if FDA grants the designation, we may not receive orphan drug exclusivity or a priority review voucher, if the program candidate does not meet the FDA requirements at the time of approval or licensure. We may seek orphan drug designations for VMT-α-NET for NET subtype indications. Typically, orphan designation is available for products intended to treat a disease or condition that affects fewer than 200,000 individuals in the United States. The sponsor must demonstrate that the program candidate meets the statutory criteria for orphan designation, and if a competitor receives orphan drug exclusivity for the same rare disease or condition, this may affect our ability to obtain orphan drug designation and/or exclusivity. We may also pursue rare pediatric disease designation for use of VMT-α-NET for advanced neuroblastoma after review of Phase 1 trial data. A priority review voucher ("PRV") may be granted to a drug indicated for a rare pediatric disease. The PRV program must be reauthorized by Congress by September 30, 2024, and a failure to reauthorize the legislation may preclude us from obtaining a PRV in the future.

We have received Fast Track designation for VMT-α-NET, but such designation may not actually lead to a faster development or regulatory review or approval process. Additionally, the FDA may rescind the designation if it determines the product candidate no longer meets the qualifying criteria for Fast Track.The FDA may grant Fast Track designation to a product candidate intended for the treatment of a serious condition and nonclinical or clinical data demonstrate the potential to address unmet medical need for this condition. We recently received Fast Track designation for VMT-α-NET. However, Fast Track designation does not ensure that we will receive marketing approval or that approval will be granted within any particular time frame. We may not experience a faster development or regulatory review or approval process with Fast Track designation compared to conventional FDA procedures. 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. Fast Track designation alone does not guarantee qualification for the FDA’s priority review procedures.

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We will face intense competition and may not be able to compete successfully. We operate in highly competitive segments of the biotechnology and biopharmaceutical markets. We face competition from many different sources, including commercial pharmaceutical and biotechnology enterprises, academic institutions, government agencies, and private and public research institutions. VMT-α-NET, VMT01 and our other program candidates, if successfully developed and approved, will compete with established therapies, as well as new treatments that may be introduced by our competitors. Many of our competitors have significantly greater financial, product development, manufacturing, and marketing resources than us. Large pharmaceutical companies have extensive experience in clinical testing and obtaining regulatory approval for drugs. We also may compete with these organizations to recruit management, scientists, and clinical development personnel. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. New developments, including the development of other biological and pharmaceutical technologies and methods of treating disease, occur in the pharmaceutical and life sciences industries at a rapid pace. Developments by competitors may render our program candidates obsolete or noncompetitive. We will also face competition from these third parties in recruiting and retaining qualified personnel, establishing clinical trial sites and patient registration for clinical trials and in identifying and in-licensing new program candidates.

There are several companies developing alpha-based radiopharmaceuticals for the treatment of cancer, including Bayer, Novartis, Bristol-Myers Squibb (with their recent acquisition of RayzeBio), Eli Lilly (with their recent acquisition of POINT Biopharma), Telix Pharmaceuticals Limited, Actinium Pharmaceuticals, Inc., RadioMedix, Inc., Orano Med, Aktis Oncology, Fusion Pharmaceuticals, Inc. (which announced on March 19, 2024 that they are being acquired by AstraZeneca), Aktis Oncology, Inc., Convergent Therapeutics, Janssen, ARTBIO and Curie Therapeutics, Inc. These companies use various alpha-emitting isotopes such as 223Ra, 225Ac, 212Pb and 227Th. Most alpha-based radiopharmaceuticals are in clinical development, with Bayer’s Xofigo® being the only approved alpha particle-based therapy. Xofigo® was approved in 2013 for the treatment of symptomatic bone metastases in people with castration-resistant prostate cancer.

There are also companies with beta-based radiopharmaceuticals, both in development and already approved. There are multiple companies, including Lantheus, Novartis and Q BioMed Inc., with approved beta-based radiopharmaceutical products using isotopes such as 131I, 177Lu, 89Sr and 90Y. Novartis’ Lutathera® and Pluvicto® are prominent beta-based radioligands, and other beta-based radiopharmaceuticals are in various stages of clinical development by companies including Novartis, Curium SAS, Nordic Nanovector, Cellectar Biosciences, ITM Isotope Technologies Munich SE, Clovis Oncology and Y-mAbs Therapeutics, Inc., Actinium Pharmaceuticals, Inc., Lantheus, Blue Earth Therapeutics and Clarity Pharmaceuticals.

For our program candidate [212Pb]VMT-α-NET, we are aware of several competing therapies targeting neuroendocrine tumors. Novartis’ Lutathera®, which was approved in 2018, uses 177Lu for the treatment of individuals with somatostatin receptor-positive gastroenteropancreatic neuroendocrine cancers. We are aware of the following companies with neuroendocrine tumor, radioligand preclinical and clinical development programs: ITM, Bristol-Myers Squibb (through their recent acquisition of RayzeBio), Eli Lilly (through their recent acquisition of POINT Biopharma) and Radiomedix. We also face potential competition from other treatments targeting neuroendocrine tumors such as Sandostatin® and Afinitor® (Novartis), Somatuline® (Ipsen) and Sutent® (Pfizer). While we believe [212Pb]VMT-α-NET has significant advantages compared to conventional approaches to neuroendocrine tumors, we may still face competition from these more established treatments.

Our success will depend upon intellectual property, proprietary technologies and regulatory market exclusivity periods, and we may be unable to protect our intellectual property. Our success will depend, in large part, on obtaining and maintaining patent protection, regulatory exclusivity and trade secret protection for VMT-α-NET, VMT01 and our other program candidates and their formulations and uses, as well as successfully defending these patents against third-party challenges. If we or our licensors fail to appropriately prosecute and maintain patent protection or obtain regulatory exclusivity for its program candidates, our ability to develop and commercialize these program candidates may be adversely affected and we may not be able to protect our competitive position. This failure to properly protect the intellectual property rights relating to these program candidates could have a material adverse effect on our financial condition and results of operations.

The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or our licensors will be successful in protecting our program candidates by obtaining and defending patents. These risks and uncertainties include the following:

● patent applications may not result in any patents being issued;

In addition to patents and regulatory exclusivity, we and our licensors also rely on trade secrets and proprietary know-how. Although we have taken steps to protect our trade secrets and unpatented know-how, including entering into confidentiality agreements with third parties, and confidential information and inventions agreements with employees, consultants and advisors, third parties may still obtain this information or come upon this same or similar information independently. We may become subject to claims that we or our consultants, advisors or independent contractors that it may engage to assist us in developing VMT-α-NET, VMT01 and our other program candidates have wrongfully or inadvertently disclosed to us or used trade secrets or other proprietary information of their former employers or their other clients.

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We intend to rely on market exclusivity periods that may not be or remain available to us. We intend to rely on our ability to obtain and maintain a regulatory period of market exclusivity for any of our program candidates, including VMT-α-NET and VMT01 that are successfully developed and approved for commercialization. The exclusivity period in Europe is currently 10 years from the date of marketing approval by the European Commission ("EC"). However, in April 2023, the EC published a proposal to reform the current pharmaceutical framework. This proposal also intends to shorten the market exclusivity period 'baseline' from ten years to eight years. The EC proposal also intends to shorten the orphan market exclusivity period for new orphan medicinal products for rare diseases. The legislative process for this reform is expected to take several years. It is currently uncertain if the proposal will be adopted in its current form, and it is uncertain if and when the revised legislation would enter into force. Once any regulatory period of exclusivity expires, depending on the status of its patent coverage and the nature of the program, we may not be able to prevent others from marketing products that are biosimilar to or interchangeable with our programs, which would materially adversely affect us.

We must deploy our sales and marketing capabilities to market, distribute and sell our programs if any of our program candidates are approved, and may not be effective in doing so. We do not currently have the infrastructure for the sales, marketing and distribution of any of our program candidates and will need to hire a sales force and develop infrastructure to perform these functions in order to commercialize any programs that we may successfully develop. This sales function may also be outsourced which could lead to additional costs.

If any program candidate that we successfully develop does not achieve broad market acceptance among physicians, patients, healthcare payors and the medical community, the revenues that we generate from their sales will be limited. Even if VMT-α-NET, VMT01 and our other program candidates receive regulatory approval, they may not gain market acceptance among physicians, patients, healthcare payors and the medical community. Coverage and reimbursement of our program candidates by third-party payors, including government payors, generally is also necessary for commercial success. The degree of market acceptance of any approved programs will depend on a number of factors, including:

● the efficacy and safety as demonstrated in clinical trials;

● the clinical indications for which the program is approved;

● acceptance of the program by the target population;

● the cost of treatment in relation to alternative treatments;

● relative convenience and ease of administration;

● the prevalence and severity of adverse events;

● the effectiveness of our sales and marketing efforts; and

● unfavorable publicity relating to the program.

If any program candidate is approved but does not achieve an adequate level of acceptance by physicians, hospitals, healthcare payors and patients, we may not generate sufficient revenue from these programs and may not become or remain profitable.

Due to the significant resources required for the development of our drug candidates, we must prioritize development of certain drug candidates and/or certain disease indications and may expend our limited resources on candidates or indications that do not yield a successful program and fail to capitalize on drug candidates or indications that may be more profitable or for which there is a greater likelihood of success. We plan to develop a pipeline of drug candidates to treat various tumors and other diseases states where targeted alpha-particle therapy may be effective. Due to the significant resources required for the development of drug candidates, we must focus our attention and resources on specific diseases and/or indications and decide which drug candidates to pursue and the number of resources to allocate to each. We are currently focusing our resources on the development of our lead program candidates, VMT-α-NET for the treatment of neuroendocrine tumors and VMT01 for the treatment of patients with metastatic melanoma where the MC1R protein is expressed on the surface of the tumor.

Our decisions concerning the allocation of research, development, collaboration, management and financial resources toward particular drug candidates or therapeutic areas may not lead to the development of any viable commercial program and may divert resources away from better opportunities. Similarly, any decision to delay, terminate or collaborate with third parties in respect of certain programs or program candidates may subsequently prove to be suboptimal and could cause us to miss valuable opportunities. If we make incorrect determinations regarding the viability or market potential of any of our programs or program candidates or misread trends in the oncology field or biotechnology industry, our business, financial condition and results of operations could be materially adversely affected. As a result, we may fail to capitalize on viable commercial programs or profitable market opportunities, be required to forego or delay pursuit of opportunities with other program candidates or other diseases and indications that may later prove to have greater commercial potential than those it choose to pursue, or relinquish valuable rights to such program candidates through collaboration, licensing or other royalty arrangements in cases in which it would have been advantageous for us to invest additional resources to retain development and commercialization rights.

If we fail to attract and retain key management and clinical development personnel, we may be unable to successfully develop or commercialize our program candidates. We are dependent on our management team and clinical development personnel and our success will depend on their continued service, as well as our ability to attract and retain other highly qualified employees, consultants and advisors for our business, including scientific and technical personnel. There is currently a shortage of highly qualified personnel in our industry, which is likely to continue. As a result, the market for the services of qualified personnel in the biotechnology and pharmaceutical industries is highly competitive. We may not be able to attract and retain personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for individuals with similar skill sets. The inability to recruit and retain qualified personnel, or the loss of service of any member of its senior management team or key personnel could prevent, impair or delay the implementation of our business plan, the progress of our research, development and commercialization objectives and would negatively impact our ability to succeed in our product development strategy. We do not carry any key man insurance for any member of our senior management team.

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Our ability to compete may decline if we do not adequately protect our proprietary rights. Our success depends on obtaining and maintaining proprietary rights to our drug candidates for the treatment of cancer, as well as successfully defending these rights against third-party challenges. We will only be able to protect our drug candidates and their uses from unauthorized use by third parties to the extent that valid and enforceable patents, or effectively protected trade secrets, cover them. Our ability to obtain patent protection for our drug candidates is uncertain due to a number of factors, including:

● our compositions and methods may not be patentable;

Even if we have or obtain patents covering our drug candidates or compositions, we may still be barred from making, using and selling our drug candidates or technologies because of the patent rights of others. Others may have filed, and in the future may file, patent applications covering compositions or products that are similar or identical to ours. There are many issued U.S. and foreign patents relating to chemical compounds and therapeutic products, and some of these relate to compounds we intend to commercialize. These could materially affect our ability to develop our drug candidates or sell our programs, if approved. Because patent applications can take many years to issue, there may be currently pending applications unknown to us that may later result in issued patents that our drug candidates or compositions may infringe. These patent applications may have priority over patent applications filed by us.

Obtaining and maintaining a patent portfolio entails significant expense and resources. Part of the expense includes periodic maintenance fees, renewal fees, annuity fees, various other governmental fees on patents and/or applications due in several stages over the lifetime of patents and/or applications, as well as the cost associated with complying with numerous procedural provisions during the patent application process. We may or may not choose to pursue or maintain protection for particular inventions. In addition, there are situations in which failure to make certain payments or noncompliance with certain requirements in the patent process can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. If we choose to forgo patent protection or allow a patent application or patent to lapse purposefully or inadvertently, our competitive position could suffer.

Risks Related to Our Discontinued Brachytherapy Industry and Operations

Continuing regulatory liability may exist from our discontinued operations. In addition to FDA-required market approvals for our program formats, our brachytherapy manufacturing operations are required to comply with the FDA’s Quality System Regulation ("QSR"), which addresses requirements for a company’s quality program such as management responsibility, good manufacturing practices, product and process design controls, document controls, purchasing controls and acceptance activities, nonconforming product requirements, corrective and preventive action requirements, labeling and packaging controls, handling, storage and distribution requirements, complaint handling, records requirements and other quality controls used in manufacturing. Additionally, labeling and promotional activities are subject to agency scrutiny and medical devices approved or cleared by FDA may not be promoted for unapproved or uncleared uses. Although the brachytherapy segment is currently being divested by us, the FDA may still hold us accountable for violations of the QSR, labeling and promotional rules, and other regulations governing medical devices that occurred prior to divesting the business segment.

We are subject to the risk that certain third parties may mishandle our product. We rely on third parties, such as Federal Express, to deliver our Cesium-131 seed, and on other third parties to package our product in certain specialized packaging forms requested by customers. We are subject to the risk that these third parties may mishandle our product, which could result in adverse effects, particularly given the radioactive nature of our product.

Quality problems with our product could harm our reputation for producing a high-quality product and erode our competitive advantage, sales and market share. Quality is extremely important to us and our customers due to the serious and costly consequences of product failure, which can include patient harm. Our operating results depend in part on our ability to sustain an effective quality control system and effectively train and manage our employee base with respect to our quality system. Our quality system plays an essential role in determining and meeting customer requirements, preventing defects and improving our product. While we have a network of quality systems throughout our business lines and facilities, quality and safety issues may occur with respect to any of our product formats. A quality or safety issue may result in a public warning letter from the FDA, product recalls or seizures, monetary sanctions, injunctions to halt manufacturing and distribution of products, civil or criminal sanctions, refusal of a government to grant clearances or approvals or delays in granting such clearances or approvals, import detentions of any future products made outside the United States, restrictions on operations or withdrawal or suspension of existing approvals. Negative publicity regarding a quality issue could damage our reputation, cause us to lose customers, or decrease demand for our product and product formats. Any of the foregoing events could disrupt our business and have an adverse effect on our results of operations and financial condition.

We rely upon key personnel. Our success will depend, to a great extent, upon the experience, abilities and continued services of our executive officers and key scientific personnel. If we lose the services of several officers or key scientific personnel, our business could be harmed. Our success also will depend upon our ability to attract and retain other highly qualified scientific and managerial personnel and their ability to develop and maintain relationships with key individuals in the industry. Competition for these personnel and relationships is intense and we compete with numerous pharmaceutical and biotechnology companies as well as with universities and non-profit research organizations. We may not be able to continue to attract and retain qualified personnel.

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Legal and Regulatory Risks Related to Our Operations

Significant disruptions of information technology systems or breaches of data security could materially adversely affect our business, results of operations and financial condition. We collect and maintain information in digital form that is necessary to conduct our business, and we are increasingly dependent on information technology systems and infrastructure to operate our business. In the ordinary course of our business, we collect, store and transmit large amounts of confidential information, including intellectual property, proprietary business information and personal information. It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such confidential information. We have established physical, electronic and organizational measures to safeguard and secure our systems to prevent a data compromise, and we rely on commercially available systems, software, tools and monitoring to provide security for our information technology systems and the processing, transmission and storage of digital information. We have also outsourced elements of our information technology infrastructure and, as a result, a number of third-party vendors may or could have access to our confidential information. Our internal information technology systems and infrastructure, and those of our current and any future collaborators, contractors and consultants and other third parties on which we rely, are vulnerable to damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, attachments to emails, persons inside its organization, or persons with access to systems inside our organization.

The risk of a security breach or disruption, particularly through cyber-attacks or cyber-intrusion, including by computer hackers, foreign governments, and cyber-terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. In addition, the prevalent use of mobile devices that access confidential information increases the risk of data security breaches, which could lead to the loss of confidential information or other intellectual property. The costs to us to mitigate network security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and while we have implemented security measures to protect our data security and information technology systems, our efforts to address these problems may not be successful, and these problems could result in unexpected interruptions, delays, cessation of service and other harm to our business and our competitive position. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs. For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Moreover, if a computer security breach affects our systems or results in the unauthorized release of personally identifiable information, our reputation could be materially damaged.

In addition, such a breach may require notification to governmental agencies, the media, or individuals pursuant to various federal and state privacy and security laws, if applicable, including the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), and its implementing rules and regulations, as well as regulations promulgated by the Federal Trade Commission ("FTC") and state comprehensive privacy and breach notification laws.

We are subject to a variety of global privacy laws, rules and regulations, and our failure to comply with them could harm our business, including but not limited to the GDPR. Under the EU regulation and notably the General Data Protection Regulation, including as implemented in the UK, (collectively, “GDPR”), penalties are imposed for the most serious personal data breaches of up to EUR 20 million or 4% of a noncompliant company’s annual global revenue, whichever is greater. The GDPR regulates the processing of personal data (including health data from clinical trials) and places certain obligations on the processing of personal data including ensuring the lawfulness of processing personal data (including obtaining valid consent of the individuals to whom the personal data relates, where applicable), the processing details disclosed to the individuals, the adequacy, relevance and necessity of the personal data collected, the retention of personal data, the sharing of personal data with third parties, the transfer of personal data out of the European Economic Area/UK to third countries including the U.S., contracting requirements (such as with clinical trial sites and vendors), the use of personal data in accordance with individual rights, the security of personal data and security breach/incident notifications. In order to comply with breach/incident notification requirements under the GDPR, the Company has to implement specific internal policies and processes for identifying, investigating, handling, mitigating and reporting personal data breaches, which implies substantial costs in resources and time.

Moreover, as we may rely on third parties to process personal information on our behalf as a processor; for example, in the context of the manufacturing of our drug candidates or for the conduct of clinical trials, we must contractually ensure that strict security measures, as well as appropriate reporting and cooperation obligations including, but not limited to an obligation to report any security incident to us without undue delay, are implemented, in order to allow us to comply with our own regulatory requirements under the GDPR.

With regard to transfer of personal data, the GDPR restricts the ability of companies to transfer personal data from the EU to the U.S. and other countries, which may adversely affect the ability of us to transfer personal data or otherwise may cause us to incur significant compliance costs for implementing lawful transfer mechanisms, conducting data transfer impact assessments, and implementing additional measures where necessary to ensure that personal data transferred are adequately protected in a manner essentially equivalent to the EU. The GDPR provides different transfer mechanisms we can use to lawfully transfer personal data from the EU to countries outside the EU. An example is relying on adequacy decisions of the European Commission, such as the EU-U.S. Data Privacy Framework. In July 2023, the European Commission adopted its adequacy decision for the EU-U.S. Data Privacy Framework. The adequacy decision concludes that the U.S. ensures an adequate level of protection (compared to that of the EU) for personal data transferred from the EU to U.S. companies participating in the EU-U.S. Data Privacy Framework. The adequacy decisions of the European Commission are subject to periodic reviews and may be amended or withdrawn. Another example of a lawful transfer mechanism is using the EU Standard Contractual Clauses as approved by the European Commission in June 2021. In order to use the EU Standard Contractual Clauses mechanism, the exporter and the importer must ensure that the importer may guarantee a level of personal data protection in the importing country that is essentially equivalent to that of the European Environment Agency. Compliance with EU data transfer obligations involves conducting transfer impact assessments, which includes documenting detailed analyses of data access and protection laws in the countries in which data importers are located, which can be costly and time consuming. Data importers must also expend resources in analyzing their ability to comply with transfer obligations, including implementing new safeguards and controls to further protect personal data.

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Data protection authorities from the different European Member States and the UK may interpret the GDPR and applicable related national laws differently and impose requirements additional to those provided in the GDPR and that sit alongside the GDPR, as set out under applicable local data protection law. In addition, guidance on implementation and compliance practices may be issued, updated or otherwise revised. Enforcement by European and UK regulators is generally active, and failure to comply with the GDPR or applicable Member State/UK local law may result in fines, among other things (such as notices requiring compliance within a certain timeframe). Further, the UK Government may amend/update UK data protection law, which may result in changes to our business operations and potentially incur commercial cost.

If we fail to comply with global data protection laws and regulations, we could be subject to government enforcement actions (which could include civil or criminal penalties), private litigation and/or adverse publicity, which could negatively affect our operating results and business. We are subject to federal, state and foreign laws and regulations governing privacy and security of personal information, including health information. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues that may affect our business. These laws may differ from each other in significant ways, thus complicating compliance efforts. Activities outside of the U.S. implicate local and national data protection standards, impose additional compliance requirements and generate additional risks of enforcement for noncompliance. The GDPR and other data protection, privacy and similar national, state/provincial and local laws may restrict the access, use, storage, disclosure and other processing activities concerning personal information abroad. Compliance with these laws is difficult, constantly evolving, time consuming, and requires a flexible privacy framework and substantial resources. Compliance efforts will likely be an increasing and substantial cost in the future. Failure to comply with such laws and regulations could result in government enforcement actions and create liability for us, including but not limited to imposition of significant penalties, private litigation (including class actions) and/or adverse publicity that could negatively affect our business.

The FTC also sets expectations for failing to take appropriate steps to keep consumers’ personal information secure or failing to provide a level of security commensurate to promises made to individual about the security of their personal information (such as in a privacy notice) may constitute unfair or deceptive acts or practices in violation of Section 5(a) of the Federal Trade Commission Act (“FTC Act”). The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. Individually identifiable health information is considered sensitive data that merits stronger safeguards. With respect to privacy, the FTC also sets expectations that companies honor the privacy promises made to individuals about how the company handles consumers’ personal information; any failure to honor promises, such as the statements made in a privacy policy or on a website, may also constitute unfair or deceptive acts or practices in violation of the FTC Act. The FTC has the power to enforce promises as it interprets them, and events that we cannot fully control, such as data breaches, may result in FTC enforcement. Enforcement by the FTC under the FTC Act can result in civil penalties or enforcement actions.

HIPAA imposes privacy and security obligations on covered entity healthcare providers, health plans and healthcare clearinghouses, as well as their "business associates;" i.e., certain persons or entities that create, receive, maintain, or transmit protected health information in connection with providing a specified service or performing a function on behalf of a covered entity. Although we are not directly subject to HIPAA, we could potentially be subject to criminal penalties if we, our affiliates or our agents knowingly receive individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA and subject to other civil and/or criminal penalties if we obtain, use or disclose information in a manner not permitted by other privacy and data security and consumer protection laws.

Our employees and independent contractors, including principal investigators, consultants, commercial collaborators, service providers and other vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have an adverse effect on our results of operations. We are exposed to the risk that our employees and independent contractors, including principal investigators, consultants, any future commercial collaborators, service providers and other vendors may engage in misconduct or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or other unauthorized activities that violate the laws and regulations of the FDA, EMA and other similar regulatory bodies, including those laws that require the reporting of true, complete and accurate information to such regulatory bodies; manufacturing standards; healthcare fraud and abuse, data privacy laws and other similar laws; or laws that require the true, complete and accurate reporting of financial information or data. Activities subject to these laws also involve the improper use or misrepresentation of information obtained in the course of clinical trials, the creation of fraudulent data in our preclinical studies or clinical trials, or illegal misappropriation of product, which could result in regulatory sanctions and cause serious harm to our reputation. 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 be in compliance with such laws or regulations. In addition, 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 financial results, including, without limitation, the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgements, possible exclusion from participation in governmental healthcare programs, individual imprisonment, other sanctions, contractual damages, reputational harm, diminished profits and future earnings and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

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If we fail to comply with applicable healthcare regulations, we could face substantial penalties, and our business, operations and financial condition could be adversely affected. Certain federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights may be applicable to our business. We could be subject to healthcare fraud and abuse and patient privacy regulation by both the federal government and the states in which we conduct our business, without limitation. The laws that may affect our ability to operate include, but are not limited to:

As disclosed in our previous annual reports on Form 10-K, from February 2006 until September 2022, we engaged a physician to serve as our medical director. The physician was the head of a physician practice that was a top customer of ours. As medical director, the physician advised the our Board of Directors and management, provided technical advice related to product development and research and development, provided internal training to our sales staff and provided professional training to our sales staff and to other physicians, among other things. In February 2023, we were contacted by the Office of the United States Attorney for the Northern District of California (the “Office”), which stated that it was investigating whether our payments to the medical director may have violated the False Claims Act and the Anti-Kickback Statute. The letter invited us to produce documents voluntarily or receive a civil investigative demand requiring the production of documents. We promptly commenced an internal review of the matter. In mid-April, we voluntarily produced documents in response to the Office’s request. In July 2023, we were informed by the California Department of Insurance (the “CA DOI”) that the CA DOI is conducting a substantially similar investigation to the one undertaken by the Office. The CA DOI requested the same materials we previously provided to the Office, and we complied with this request.

In September 2023, the Office informed us that there was a qui tam action underlying its investigation, and that the Office had declined to intervene in that action, and that the CA DOI similarly would not pursue any action against us regarding those same qui tam allegations. The qui tam action was originally filed on October 11, 2022, and unsealed on or about August 11, 2023. In November 2023, the complainant filed a notice to dismiss the complaint without prejudice and the United States and the State of California both consented to dismissal without prejudice. In January 2024, the court granted the dismissal without prejudice.

Governmental regulations outside the U.S. have become increasingly stringent and more common, and we may become subject to more rigorous regulation by governmental authorities in the future. Penalties for a company’s noncompliance with governmental regulation could be severe, including fines and revocation or suspension of a company’s business license, mandatory price reductions and criminal sanctions. Any governmental law or regulation imposed in the future may have a material adverse effect on us.

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Because of the breadth of these various fraud and abuse laws, it is possible that some of our business activities could be subject to challenge under one or more of such laws. Such a challenge could have material adverse effects on our business, financial condition, and operations. In the event governmental authorities conclude that if our business practices do not comply with any of the laws described above or the other governmental regulations to which we, our distributors or our customers are subject, the government may impose sanctions under these laws, which are potentially significant and may include civil penalties, damages, fines, exclusion from Medicare, Medicaid and other government programs, criminal fines and imprisonment, and the curtailment or restructuring of our operations. If we are required to obtain permits or licensure under these laws that we do not already possess, we may become subject to substantial additional regulation or incur significant expense. Any penalties, damages, fines, curtailment or restructuring of our operations would adversely affect our ability to operate our business and our financial results. The risk of our being found in violation of these laws is increased by the fact that many of them have not been fully or clearly interpreted by the regulatory authorities or the courts, and their provisions are subject to a variety of interpretations and additional legal or regulatory change. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management’s attention from the operation of our business and damage our reputation. Moreover, achieving and sustaining compliance with applicable federal and state privacy, security and fraud laws may prove costly.

We are subject to U.S. and foreign anti-corruption and anti-money laundering laws with respect to our operations and noncompliance with such laws can subject us to criminal and/or civil liability and harm our business. We are subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, and possibly other state and national anti-bribery and anti-money laundering laws in countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, third-party intermediaries, joint venture partners and collaborators from authorizing, promising, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector. We engage third-party investigators, CROs and other consultants to design and perform preclinical studies of our drug candidates and will do the same for any clinical trials. Also, once a drug candidate has been approved and commercialized, we may engage third-party intermediaries to promote and sell our programs abroad and/or to obtain necessary permits, licenses and other regulatory approvals. We or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We will be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, collaborators, partners, and agents, even if we do not explicitly authorize or have actual knowledge of such activities. Our international suppliers create the risk of unauthorized payments or offers of payments by one of our employees, consultants, sales agents, or distributors, because these parties are not always subject to our control.

Noncompliance with anti-corruption and anti-money laundering laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension and/or debarment from contracting with certain persons, the loss of export privileges, reputational harm, adverse media coverage and other collateral consequences. If any subpoenas, investigations, or other enforcement actions are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, results of operations and financial condition could be materially harmed. In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense and compliance costs and other professional fees. In certain cases, enforcement authorities may even cause us to appoint an independent compliance monitor which can result in added costs and administrative burdens.

Healthcare reform measures could hinder our programs’ commercial success. In both the United States and certain foreign jurisdictions there have been, and we anticipate there will continue to be, a number of legislative and regulatory changes to the healthcare system that could impact our ability to sell our program profitably. In the United States, the ACA and the Health Care and Education Affordability Reconciliation Act of 2010 (together “the law”) provide for a number of healthcare policy changes that are or will be applicable to us. However, there are many programs and requirements under the law for which the consequences are not fully understood, and it is unclear what the full impacts will ultimately be from the law. The law also focuses on a number of Medicare provisions aimed at improving quality and decreasing costs. It is uncertain at this point what negative unintended consequences these provisions will have on patient access to new technologies. The Medicare provisions include value-based payment programs, increased funding of comparative effectiveness research, reduced hospital payments for avoidable readmissions and hospital acquired conditions, and pilot programs to evaluate alternative payment methodologies that promote care coordination (such as bundled physician and hospital payments). Additionally, the law includes a reduction in the annual rate of inflation for Medicare payments to hospitals that began in 2011 and the establishment of an independent payment advisory board to recommend ways of reducing the rate of growth in Medicare spending.

Our ability or the ability of our collaborators to commercialize any of our program candidates that we successfully develop may depend, in part, on the extent to which government health administration authorities, private health insurers and other organizations will reimburse consumers for the cost of these programs. These third parties are increasingly challenging both the need for and the price of new drug products. Significant uncertainty exists as to the reimbursement status of newly approved therapeutics. Adequate third-party reimbursement may not be available for our program candidates to enable us or our collaborators to maintain price levels sufficient to realize an appropriate return on our investment in research and product development.

The potential pricing and reimbursement environment for VMT-α-NET, VMT01 and our other program candidates and any future programs may change in the future and become more challenging due to, among other reasons, policies advanced by the current or any new presidential administration, federal agencies, healthcare legislation passed by Congress, or fiscal challenges faced by all levels of government health administration authorities.

In the EU, an important and foreseeable example of reform measures is the forthcoming EU pharmaceutical legislation revision. In April 2023, the European Commission published a proposal to reform the current European pharmaceutical legislative framework. The proposal intends to reduce the regulatory data protection and orphan market exclusivity periods. It is currently uncertain if the proposal will be adopted in its current form, and it is uncertain if and when the revised legislation would enter into force.

The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to make and implement healthcare reforms may adversely affect:

● our ability to set a price we believe is fair for our program;

● our ability to generate revenues and achieve or maintain profitability;

● the availability of capital; and

● our ability to obtain timely approval of any future program modifications.

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Centers for Medicare & Medicaid Services ("CMS") implemented regulations under the ACA related to disclosure of payments made by manufacturers to physicians and teaching hospitals. Because we manufacture programs that are covered by the regulations, all payments that we make to physicians and teaching hospitals are subject to this reporting requirement even if the payment relates to a program that is not considered a covered program. The tracking and reporting of these payments could have an adverse impact on our business and/or consolidated results of operations and financial condition and on our relationships with customers and potential customers.

Since its enactment, there have been judicial challenges, as well as efforts by Congress to modify, and agencies to alter the implementation of, certain aspects of the ACA and related laws. In the future, Congress may consider other legislation to modify elements of the ACA or related laws or enact other healthcare reform measures, agencies may further alter their implementation of elements of the ACA or related laws or implement other such measures, and other judicial challenges to elements of the ACA or related law or other healthcare reform measures may be brought. The extent to which any such changes may impact our business or financial condition is uncertain.

State legislatures also have shown significant interest in implementing cost-containment programs or policies to limit the growth of healthcare costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. For example, some states have established Prescription Drug Affordability Boards (or similar entities) to review high-cost drugs and, in some cases, set upper payment limits.

We expect that these and other healthcare reform measures in the future may result in more rigorous coverage criteria or lower reimbursement, or in additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government-funded programs may result in a similar reduction in payments from private payers. The implementation of cost containment measures or other healthcare reforms may hinder us in generating revenue, attaining profitability or commercializing our drugs, once marketing approval is obtained.

If, once we offer commercialized products, we participate in the Medicaid Drug Rebate Program and other governmental pricing programs, failure to comply with obligations under these programs could result in additional price concession requirements, penalties, sanctions and fines, which could have a material adverse effect on our business, operations and financial condition. Under the Medicaid Drug Rebate Program, a participating manufacturer is required to pay a rebate to each state Medicaid program for its covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by the state Medicaid program as a condition of having federal funds being made available for drugs under Medicaid and Medicare Part B. Those rebates are based on pricing data reported by the manufacturer on a monthly and quarterly basis to CMS. These data include the average manufacturer price and, in the case of innovator products, the best price for each drug, which, in general, represents the lowest price available from the manufacturer to any wholesaler, retailer, provider, health maintenance organization, nonprofit entity, or governmental entity in the U.S. in any pricing structure, calculated to include all sales and associated rebates, discounts and other price concessions. If we fail to pay the required rebate amount or report pricing data on a timely basis, we may be subject to civil monetary penalties and/or termination from the Medicaid Drug Rebate program. Additionally, civil monetary penalties can be applied if we are found to have knowingly submitted any false price or product information to the government, if we fail to submit the required price data on a timely basis, or if we misclassify or misreport product information. CMS could also decide to terminate any Medicaid drug rebate agreement, in which case federal payments may not be available under Medicaid or Medicare Part B for our covered outpatient drugs, if commercialized. Our failure to comply with such price reporting and rebate payment requirements could negatively impact our financial results.

Federal law requires that a manufacturer also participate in the 340B Drug Pricing program in order for federal funds to be available for the manufacturer’s drugs under Medicaid and Medicare Part B. The 340B program requires participating manufacturers to agree to charge no more than the 340B “ceiling price” for the manufacturer’s covered outpatient drugs to a specified “covered entities,” including community health centers and other entities that receive certain federal grants, as well as certain hospitals that serve a disproportionate share of low-income patients. The 340B ceiling price is calculated using a statutory formula, which is based on the average manufacturer price and rebate amount for the covered outpatient drug as calculated under the Medicaid Drug Rebate Program. If we are found to have knowingly and intentionally charged 340B covered entities more than the statutorily mandated ceiling price for any of our commercialized products, we could be subject to significant civil monetary penalties and/or such failure could be grounds for the Health Resources and Services Administration to terminate our agreement to participate in the 340B program, in which case our covered outpatient drugs, once commercialized, would no longer be eligible for federal payment under the Medicaid or Medicare Part B program.

Further, the IRA established a Medicare Part B inflation rebate scheme and a drug price negotiation program, with the first negotiated prices to take effect in 2026. Manufacturers may be subject to civil monetary penalties for certain violations of the negotiation and inflation rebate provisions and an excise tax during any noncompliance period under the negotiation program.

In order to be eligible to have its products paid for with federal funds under the Medicaid and Medicare Part B programs and purchased by the Department of Veterans Affairs (“VA”), Department of Defense (“DoD”), Public Health Service, and Coast Guard (the “Big Four agencies”) and certain federal grantees, a manufacturer is required to participate in the VA Federal Supply Schedule (“FSS”) pricing program, established under Section 603 of the Veterans Health Care Act of 1992. Under this program, the manufacturer is obligated to make its covered drugs available for procurement on an FSS contract and charge a price to the Big Four agencies that is no higher than the Federal Ceiling Price (“FCP”), which is a price calculated pursuant to a statutory formula. The FCP is derived from a calculated price point called the “non-federal average manufacturer price” (“Non FAMP”), which the manufacturer calculates and reports to the VA on a quarterly and annual basis. Pursuant to applicable law, knowing provision of false information in connection with a Non FAMP filing can subject a manufacturer to significant penalties for each item of false information. The FSS contract also contains extensive disclosure and certification requirements. If we overcharge the government in connection with the FSS contract, whether due to a misstated FCP or otherwise, we will be required to refund the difference to the government. Failure to make necessary disclosures and/or to identify contract overcharges can result in allegations against us under the False Claims Act and other laws and regulations. Unexpected refunds to the government, and any response to government investigation or enforcement action, would be expensive and time consuming, and could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Under Section 703 of the National Defense Authorization Act for FY 2008, the manufacturer is required to pay quarterly rebates to DoD on utilization of its innovator products that are dispensed through DoD’s Tricare network pharmacies to Tricare beneficiaries. The rebates are calculated as the difference between the annual Non FAMP and FCP for the calendar year that the product was dispensed. A manufacturer that fails to comply with the requirements of the Tricare Retail Pharmacy Rebate Program may have its products excluded from Tricare retail pharmacies and/or the Tricare pharmacy benefits program; may be subject to interest, penalties and administrative fees; and, depending on the actions of the manufacturer, may be subject to allegations under the False Claims Act and other laws and regulations.

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In addition, some states have established price reporting and related requirements, to which certain penalties attach. These state programs, in addition to the Medicaid, 340B, FSS, and Tricare programs, could adversely affect the success of any products that we commercialize in the future. If we fail to comply with any applicable obligations under governmental pricing programs that we participate in, we could be subject to additional reimbursement requirements, significant civil monetary penalties, sanctions and fines, and those could negatively impact our business, financial condition, results of operations and growth prospects.

Pricing and rebate calculations are complex, vary across products and programs, and are often subject to interpretation by the manufacturer, governmental agencies, and courts. A manufacturer that becomes aware that its Medicaid reporting for a prior quarter was incorrect, or has changed as a result of recalculation of the pricing data, is obligated to resubmit corrected data up to three years after those data originally were due. Restatements and recalculations increase the costs for complying with the laws and policies governing the Medicaid Drug Rebate program and could result in an overage or underage in our rebate liability for past quarters. They also may affect the 340B ceiling price and therefore liability under the 340B program.

Additionally, if we offer cost-sharing assistance to patients, pharmacy benefit manager (“PBM”) “accumulator” programs (including copayment “maximizer” programs) may negatively affect our financial results.

We may be unable to adequately protect or enforce our intellectual property rights or secure rights to third-party patents. Our ability and the abilities of our distributors to obtain and maintain patent and other protection for our program will affect our success. We are assigned, have rights to, or have exclusive licenses to patents and patents pending in the U.S. and numerous foreign countries. The patent positions of biopharmaceutical companies can be highly uncertain and involve complex legal and factual questions. Our patent rights may not be upheld in a court of law if challenged. Our patent rights may not provide competitive advantages for our program and may be challenged, infringed upon, or circumvented by our competitors. We cannot patent our program in all countries or afford to litigate every potential violation worldwide.

Because of the large number of patent filings in the biotechnology field, our competitors may have filed applications or been issued patents and may obtain additional patents and proprietary rights relating to our program or processes competitive with or similar to ours. We cannot be certain that U.S. or foreign patents do not exist or will not be issued that would harm our ability to commercialize our future program candidates.

Pending and future patent litigation could be costly and disruptive and may have an adverse effect on our financial condition and results of operations. We operate in an industry characterized by extensive patent litigation. Potential patent claims include challenges to the coverage and validity of our patents on our program or processes as well as allegations that our program infringes patents held by competitors or other third parties. A loss in any of these types of cases could result in a loss of patent protection or the ability to market our program, which could lead to a significant loss of sales, or otherwise materially affect future results of operations.

Our commercial success will depend in part on not infringing the patents or violating the other proprietary rights of third parties. Intellectual property litigation is expensive and complex, and outcomes are difficult to predict. Any pending or future patent litigation may result in significant damage awards, including treble damages under certain circumstances, and injunctions that could prevent the manufacture and sale of an affected program or force us to make significant royalty payments in order to continue selling the affected program. At any given time, we may be involved as either a plaintiff or a defendant in a number of patent infringement actions, the outcomes of which may not be known for prolonged periods of time. As a healthcare supplier, we can expect to face claims of patent infringement in the future. A successful claim of patent or other intellectual property infringement against us could adversely affect our results of operations and financial condition.

Our success also depends upon our ability and the ability of any of our future collaborators to develop, manufacture, market and sell our program candidates without infringing the proprietary rights of third parties. Numerous United States and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing programs, some of which may be directed at claims that overlap with the subject matter of our intellectual property. Because patent applications can take many years to issue, there may be currently pending applications, unknown to us, which may later result in issued patents that our program candidates or proprietary technologies may infringe. Similarly, there may be issued patents relevant to our program candidates of which we are not aware.

There is a substantial amount of litigation involving patent and other intellectual property rights in the biotechnology and biopharmaceutical industries generally. If a third party claims that we or any of our licensors, suppliers or collaborators infringe the third party’s intellectual property rights, we may have to:

The value of our granted patents, and our patents pending, is uncertain. Although our management strongly believes that our patents and anticipated future patent applications, which have not yet been filed, have significant value, we cannot be certain that other like-kind processes may not exist or be discovered, that any of these patents is enforceable, or that any of our pending or future patent applications will result in issued patents.

Failure to comply with government regulations could harm our business. As a targeted alpha therapy manufacturer, we are subject to extensive, complex, costly, and evolving governmental rules, regulations and restrictions administered by the FDA, the FAA and other federal and state agencies, and by governmental authorities in other countries. Compliance with these laws and regulations is expensive and time consuming, and changes to or failure to comply with these laws and regulations, or adoption of new laws and regulations, could adversely affect our business.

In the United States, as a manufacturer of targeted alpha therapy utilizing radioactive by-product material, we are subject to extensive regulation by federal, state and local governmental authorities, such as the FDA and the NRC, to ensure such products are safe and effective. Regulations promulgated by the FDA under the U.S. Food, Drug and Cosmetic Act, govern the design, development, testing, manufacturing, packaging, labeling, distribution, marketing and sale, post-market surveillance, repairs, replacements, and recalls of our program candidates.

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The FAA has authority to regulate, through its Office of Hazardous Materials Safety, the offering for shipment of hazardous materials onboard aircraft, including radioactive materials of the type marketed by us. The FAA is also responsible for enforcement of hazardous materials regulations for air transportation promulgated by the United States Pipeline and Hazardous Materials Safety Administration. Because we ship hazardous materials on flights in the U.S., we are subject to these regulations, including periodic audit and, if applicable, enforcement action by the FAA. As they apply to us, the FAA regulations concern the packaging and labeling of hazardous materials. If we fail to comply with these regulations, we could face civil or criminal penalties. The NRC regulates the possession, use, and disposal of radioactive byproduct material as well as the manufacture of radioactive sealed sources to ensure compliance with state and federal laws and regulations. Our targeted alpha therapy programs are subject to these regulations.

In addition to FDA-required market approvals for our program candidates, our manufacturing operations are required to comply with the FDA’s cGMP regulations, which address requirements for a company’s quality program such as management responsibility, good manufacturing practices, product and process design controls, and quality controls used in manufacturing. For example, the manufacturing facility we recently acquired in Somerset, New Jersey is a cGMP compliant facility, and we intend to utilize the facility to manufacture clinical supply of high quality 203Pb-labeled tumor-specific peptides to visualize and diagnose tumors, and 212Pb-labeled radiopharmaceuticals to treat target tumors with TAT. We will need to ensure that the facility, including our three cGMP suites, continue to meet the standards necessary to be a cGMP-compliant facility.

Compliance with applicable regulatory requirements is monitored through periodic inspections by the FDA Office of Regulatory Affairs. We anticipate both announced and unannounced inspections by the FDA. Such inspections could result in noncompliance reports (Form 483) which, if not adequately responded to, could lead to enforcement actions. The FDA can institute a wide variety of enforcement actions ranging from public warning letters to more severe sanctions such as fines; injunctions; civil penalties; recall of our program; operating restrictions; suspension of production; non-approval or withdrawal of pre-market clearances for new programs or existing programs and criminal prosecution. There can be no assurance that we will not incur significant costs to comply with these regulations in the future or that the regulations will not have a material adverse effect on our business, financial condition and results of operations.

In addition to the ACA, various healthcare reform proposals have also emerged at the state level. Like the ACA, these proposals could reduce medical procedure volumes and impact the demand for our program or the prices at which we sell our program. The impact of these proposals could have a material adverse effect on our business and/or consolidated results of operations and financial condition.

Any cuts to Medicare reimbursement which affect our program could have a material adverse effect on our business and/or our consolidated results of operations and financial condition.

The marketing of our program in foreign countries will, in general, be regulated by foreign governmental agencies similar to the FDA. Foreign regulatory requirements vary from country to country. The time and cost required to obtain regulatory approvals could be longer than that required for FDA clearance in the United States and the requirements for licensing a program in another country may differ significantly from FDA requirements. We will rely, in part, on foreign distributors to assist us in complying with foreign regulatory requirements. We may not be able to obtain these approvals without incurring significant expenses or at all, and the failure to obtain these approvals would prevent us from selling our program in the applicable countries. This could limit our sales and growth.

Our business exposes us to product liability claims. We face an inherent risk of product liability exposure based on our previously marketed products, the use of VMT-α-NET, VMT01 and our other program candidates in human clinical trials, or, if obtained, following their marketing approval and commercialization. Claims could be brought against us if use or misuse of one of our program candidates causes, or merely appears to have caused, personal injury or death. Although we have and intend to maintain product liability insurance relating to our clinical trials, our coverage may not be sufficient to cover claims that may be made against us, and we may be unable to maintain such insurance. Any claims against us, regardless of their merit, could severely harm our financial condition, strain our management and other resources or destroy the prospects for commercialization of the program which is the subject of any such claim. We are unable to predict if we will be able to obtain or maintain product liability insurance for any programs that may be approved for marketing. Additionally, we have entered into various agreements where it indemnifies third parties for certain claims relating to the testing and use of our program candidates. These indemnification obligations may require us to pay significant sums of money for claims that are covered by these indemnifications.

We cannot predict all of the possible harms or side effects that may result from the use of our programs and, therefore, the amount of insurance coverage we currently hold, or that we or our collaborators may obtain, may not be adequate to protect us from any claims arising from the use of its programs that are beyond the limit of its insurance coverage. If we cannot protect against potential liability claims, we or our collaborators may find it difficult or impossible to commercialize our programs, and we may not be able to renew or increase our insurance coverage on reasonable terms, if at all. The marketing, sale and use of our programs and our planned future programs could lead to the filing of product liability claims against us if someone alleges that our programs failed to perform as designed. A product liability or professional liability claim could result in substantial damages and be costly and time consuming for us to defend.

Any product liability or professional liability claim brought against us, with or without merit, could increase our insurance rates or prevent us from securing insurance coverage. Additionally, any product liability lawsuit could damage our reputation, result in the recall of programs, or cause current partners to terminate existing agreements and potential partners to seek other partners, any of which could impact our results of operations.

Although we believe that as of the date of this Annual Report, we have adequate insurance to address anticipated potential liabilities associated with product liability, any unforeseen product liability exposure in excess of, or outside the scope of, such insurance coverage could adversely affect our financial condition and operating results. Any such claim brought against us, with or without merit, could result in significant damage to our business. Insurance coverage is expensive and difficult to obtain and, although we currently have a $10 million policy, in the future we may be unable to obtain or renew coverage on acceptable terms, if at all. If we are unable to obtain or renew sufficient insurance at an acceptable cost or if a successful product liability claim is made against us, whether fully covered by insurance or not, our business could be harmed. The FDA’s reporting regulations require us to report any incident in which our program may have caused or contributed to a death or serious injury. Any required filing could result in an investigation of our program and possibly subsequent regulatory action against us if it is found that one of our programs caused the death or serious injury of a patient.

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Our business involves environmental risks. Our business involves the controlled use of hazardous materials, chemicals, biological and radioactive compounds that could be dangerous to human health and safety or could contaminate the environment. Manufacturing is extremely susceptible to product loss due to radioactive, microbial, or viral contamination; material or equipment failure; vendor or operator error; or the very nature of a radioactive product’s short half-life. Although we believe that our procedures for handling, storing, using, labeling and disposing of such materials comply with state and federal standards, if we fail to comply with such standards, we could face substantial fines, restrictions on our operations or possible revocation of our authority to conduct some of our operations. In addition, environmental, health and safety requirements have become, and may continue to become, increasingly stringent, and our costs may increase as a result. New or revised laws and regulations or new interpretations of existing laws and regulations, could affect the operation of our business or result in significant additional expense and operating restrictions on us.

Moreover, regardless of our compliance, there will always be some risk of accidental contamination or injury for which we could be held liable. Contamination may cause the closure of the manufacturing facility for an extended period of time. By law, radioactive materials and hazardous wastes may only be disposed of at approved facilities. We use commercial disposal contractors for such disposal as needed.

We will be responsible for any radioactive waste produced during our ownership of the facility for our discontinued brachytherapy operations. We will incur costs related to the clean-up and disposal of hazardous materials, chemicals, and radioactive components of this facility. While management believes it has reserved a sufficient amount of funds for this process, we may need more than the amount of the asset retirement obligation to meet the lease requirements and to receive clearance from the Washington State Department of Health. We may incur substantial costs related to the disposal of these materials.

In addition, certain environmental laws and regulations impose liability on current or previous owners or operators of real property for the costs of investigation, removal or remediation of releases of hazardous substances or petroleum products at or from those properties. Further, we may be liable if we arrange for the treatment or disposal of hazardous substances, without regard to whether we complied with environmental laws in doing so. Liability for investigative, removal and remedial costs under certain U.S. federal and state laws are retroactive, strict, and joint and several. In addition to cleanup actions brought by governmental authorities, private parties could bring claims for cleanup, personal injury, property damage, or natural resource damage due to the presence of, or exposure to, hazardous substances. Further, the government could impose liens on, or restrict our operations at, any contaminated properties. The ultimate of the foregoing and timing of future cash outflows is difficult to predict, given the uncertainties regarding the extent of any injuries, damages or required cleanup, the interpretation of applicable laws and regulations, and alternative cleanup methods.

In April 2023, the European Commission published a proposal to reform the current European pharmaceutical legislative framework. This proposal imposes stricter rules regarding the ‘Environmental Risk Assessment’ that pharmaceutical manufacturers are obliged to perform. Under the new legislation, noncompliance with the (extensive) Environmental Risk Assessment requirements can result in the withdrawal or refusal of a marketing authorization.

Fluctuations in insurance cost and availability could adversely affect our profitability or our risk management profile. We hold a number of insurance policies, including product liability insurance, directors’ and officers’ liability insurance, and workers’ compensation insurance. If the costs of maintaining adequate insurance coverage increase significantly in the future, our operating results could be materially adversely affected. Likewise, if any of our current insurance coverage should become unavailable to us or become economically impractical, we would be required to operate our business without indemnity from commercial insurance providers. If we operate our business without insurance, we could be responsible for paying claims or judgments against us that would have otherwise been covered by insurance, which could adversely affect our results of operations or financial condition.

Risks Related to Ownership of Shares of Common Stock and Public Company Status

The concentration of our common share ownership will likely limit the ability of the other shareholders to influence corporate matters. As of March 22, 2024, executive officers, directors, 5% or greater shareholders, and their respective affiliated entities beneficially owned, in the aggregate, approximately 137,810,620 of our outstanding common shares. Lantheus Alpha Therapy, LLC, a Delaware limited liability company and wholly owned subsidiary of Lantheus Holdings, Inc. (“Lantheus”) owned approximately 19.90% of our outstanding common shares as of March 22, 2024.

As a result, Lantheus can significantly influence the outcome of matters requiring shareholder approval, including the election of directors, amendments of our organizational documents, or approval of any merger, sale of assets or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common shares that you may feel are in your best interest. The interests of Lantheus may not always coincide with your interests or the interests of other shareholders and they may act in a manner that advances their best interests and not necessarily those of other shareholders, including seeking a premium value for their common shares. These actions might affect the prevailing market price for our common shares. In addition, Lantheus and certain of our other principal shareholders that have held their shares for several years may be more interested in selling our company to an acquirer than other investors, or they may want us to pursue strategies that deviate from the interests of other shareholders. Such concentration of ownership control may also:

● delay, defer or prevent a change in control;

● entrench our management and/or the board of directors; or

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Our stock price has been and may continue to be volatile. The market price of our common stock has experienced fluctuations and is likely to fluctuate significantly in the future. For example, during 2023 and through March 22, 2024, the closing price of one share of our common stock reached a high of $1.34 and a low of $0.21. There is generally significant volatility in the market prices and limited liquidity of securities of companies which have failed to show profits. Contributing to this volatility are various events that can affect our stock price in a positive or negative manner. These events include, but are not limited to: governmental approvals or refusals to approve drug products; delays in or termination of clinical trials; clinical data readouts from our clinical trials; market acceptance of our program candidates; announcements by competitors of new program candidates or technologies; litigation involving us or our industry; developments or disputes concerning our patents or other proprietary rights; changes in the structure of healthcare payment systems; departure of key personnel; future sales of our securities; fluctuations in our financial results or those of companies that are perceived to be similar to us; investors’ general perception of us; and general economic, industry and market conditions. In addition, the securities of many preclinical biotechnology companies, including us, have historically been subject to extensive price and volume fluctuations that may affect the market price of their common stock. If any of these events occur, it could cause our stock price to rise or fall. As a result of this volatility, investors may not be able to sell their common stock at or above the price paid for the shares.

The price of our common stock may be adversely affected by the future issuance and sale of shares of our common stock or other equity securities. Sales of a substantial number of shares of our common stock or other equity securities, or the perception by the market that those sales could occur, could cause the market price of our common stock to decline or could make it more difficult for us to raise funds through the sale of equity in the future. We have previously entered into the Sales Agreement, pursuant to which, from time to time, we may offer and sell shares of our common stock with an aggregate offering price of up to $50.0 million under an “at-the-market” offering program. As of March 22, 2024, we have common stock that we may issue and sell for gross proceeds of up to $49.6 million that remain available under our at-the-market offering program. Future issuances of our common stock or our other equity securities could further depress the market for our common stock. We expect to continue to incur commercialization, drug development and selling, general and administrative costs, and to satisfy our funding requirements, we may need to sell additional equity securities. The sale or the proposed sale of substantial amounts of our common stock or our other equity securities may adversely affect the market price of our common stock and our stock price may decline substantially. Our stockholders may experience substantial dilution and a reduction in the price that they are able to obtain upon sale of their shares. New equity securities issued may have greater rights, preferences or privileges than our existing common stock.

We do not expect to pay any dividends for the foreseeable future. We do not anticipate paying any dividends to our stockholders for the foreseeable future. Stockholders must be prepared to rely on sales of their common stock after price appreciation to earn an investment return, which may never occur. Any determination to pay dividends in the future will be made at the discretion of our Board of Directors and will depend on our results of operations, financial conditions, contractual restrictions, restrictions imposed by applicable laws and other factors that our Board deems relevant.

Our business could be negatively impacted by corporate citizenship andsustainabilitymatters. There is an increased focus from certain investors, employees and other stakeholders concerning corporate citizenship and sustainability matters, which include environmental concerns and social investments. We could fail to meet, or be perceived to fail to meet, the expectations of these certain investors, employees and other stakeholders concerning corporate citizenship and sustainability matters, thereby resulting in a negative impact to our business.

Social media platforms have significantly altered the dynamics of corporate communications and present risks and challenges, some of which are, and may continue to be unknown to us.As social media continues to expand, it also presents us with new challenges. The inappropriate or unauthorized use of our confidential information on media platforms could cause brand damage or information leakage, which would cause legal or regulatory issues for us. In addition, negative, inappropriate or inaccurate posts or comments about us or our program candidates on social media internet sites could quickly and irreversible damage our reputation, image and goodwill. Further, the accidental or intentional disclosure of non-public sensitive information by our workforce or others through media channels could lead to information loss or could lead to legal or regulatory issues for us. In addition, there is a risk of a fraudulent third-party hijacking our information technology systems without our knowledge to access our confidential documents or to use our company name, logo or brand without authorization. If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face restrictive regulatory actions or incur other harm and costs to our business.

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ITEM 1B – UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 1C – CYBERSECURITY

We are increasingly dependent on sophisticated software applications, computing, and cloud infrastructure to conduct key operations. We depend on both our own systems, networks, and technology as well as the systems, networks and technology of our contractors, consultants, vendors and other business partners.

Cybersecurity Program

Given the importance of cybersecurity to our business, we maintain a cybersecurity program to support both the effectiveness of our systems and our preparedness for information security risks. This program includes a number of administrative, physical and technical safeguards, including contracted 24/7/365 Security Operating Center monitoring services and alerting systems for internal and external threats; regular evaluations of our cybersecurity program, including periodic internal and external audits; and industry benchmarking. We also require cybersecurity trainings when onboarding new employees and conduct cybersecurity awareness testing for our employees. Our program leverages industry frameworks, including the National Institute of Standards and Technology Cybersecurity Framework to strengthen our program effectiveness and reduce cybersecurity risks.

We use a risk-based approach with respect to our use and oversight of third-party service providers. We use various means to assess cyber risks related to our third-party service providers, including conducting due diligence in connection with onboarding new vendors and ongoing due diligence with key third-party vendors. We also seek to collect and assess cybersecurity audit reports and other supporting documentation when available where applicable as part of our oversight of third-party providers.

Process for Assessing, Identifying and Managing Material Risks from Cybersecurity Threats

In the event of a cybersecurity incident, we maintain a regularly tested cybersecurity incident response program. Pursuant to the program and its escalation protocols, designated personnel are responsible for handling and managing potential cybersecurity incidents.

We have relationships with a number of third-party service providers to assist with cybersecurity incident containment and remediation efforts.

Governance

Management Oversight

The controls and processes employed to assess, identify and manage material risks from cybersecurity threats are implemented and overseen by our Chief Financial Officer (“CFO”) in connection with our managed service provider. Our managed service provider is a System and Organization Controls ("SOC") 2 accredited IT services firm which completes required annual audits, providing evidence of ongoing compliance to maintain the SOC 2 designation. They have over a decade of experience delivering services and consulting for regulatory security requirements. Our managed service provider is responsible for the day-to-day management of the cybersecurity program, including the prevention, detection, investigation, response to, and recovery from cybersecurity threats and incidents, and are regularly engaged to help ensure the cybersecurity program functions effectively in the face of evolving cybersecurity threats. The managed service provider provides regular briefings for our senior management team on cybersecurity matters, including threats, events and program enhancements.

Board Oversight

The Board of Directors ("Board") has overall responsibility for risk oversight and oversees cybersecurity risk matters. The Board is responsible for reviewing, discussing with management and overseeing the Company’s data privacy, information technology and security and cybersecurity risk exposures. On a regular basis, the CFO reports to the Board or the Audit Committee of the Board on information technology and cybersecurity matters, including key risks, the potential impact of those exposures on the Company’s business, financial results, operations and reputation, the programs and steps implemented by management to monitor and mitigate exposures, the Company’s information governance and cybersecurity policies and programs, and significant legal/regulatory developments that could materially impact the Company’s cybersecurity risk exposure.

The CFO also apprises the Board of cybersecurity incidents promptly for more significant incidents and in the aggregate for less significant incidents.

Cybersecurity Risks

Our senior management identify, assess and evaluate risks impacting our operations across the Company, including those risks related to cybersecurity. Senior management is asked to consider the severity and likelihood of certain risk factors, drawing upon their company knowledge and past business experience.

We maintain specific coverage to mitigate losses associated with cybersecurity incidents that impact our or our third parties' systems, networks, and technology.

As of December 31, 2023, we are not aware of any material risks form cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected the business strategy, results of operations or financial condition of the Company or are reasonably likely to have such a material effect. While we maintain a comprehensive cybersecurity program, the techniques used to infiltrate information technology systems continue to evolve. Accordingly, we may not be able to timely detect threats or anticipate and implement adequate security measures. For additional information, see “Item 1A—Risk Factors.”

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ITEM 2 – PROPERTIES

The Company's executive offices are located at 2401 Elliott Avenue, Suite 320, Seattle, WA 98121, where it leases approximately 6,400 square feet of office space for approximately $9,125 per month subject to increases as defined in the lease agreement plus the Company’s share of taxes and common area expenses. The lease terminates in October 2028.

In addition, the Company leases laboratory and office space at 2500 Crosspark Road, Coralville, IA 52241 ("BioVentures Center") in the University of Iowa Research Park for approximately $12,600 per month. The leases have been renewed on an annual basis and currently runs through November 2024. In addition, the lease at the BioVentures Center grants 24/7 access for Perspective employees to the University of Iowa core laboratories including the vivarium, small animal imaging facilities, pathology, microscopy, mass spectrometry, nuclear magnetic resonance and other molecular characterization facilities.

In December 2022, Perspective completed the purchase of a 20,000 square-foot building located at 4125 Westcor Ct. Coralville, IA that is currently used only for office space and will be built out to accommodate laboratory and manufacturing space in the future.

In January 2024, Perspective announced its intent to acquire the lease of Lantheus' radiopharmaceutical manufacturing facility located at 110 Clyde Road, Somerset, NJ, and Perspective has subsequently agreed to acquire Lantheus’ office lease at 270 Davidson Avenue, Suite 320, Somerset, NJ. The Clyde Road lease rent is approximately $6,200 per month for approximately 11,400 square feet for sole and exclusive use, 700 square feet of common space and approximately 500 square feet of joint use space (each as defined in the agreement), and the lease terminates in November 2028. The Davidson Avenue lease rent is approximately $12,500 per month for 8,000 square feet and the lease will terminate in August 2026. The Davidson Avenue office lease was acquired in February 2024, and the Clyde Road facility lease was acquired in March 2024.

In December 2023, Perspective announced the divestiture of the brachytherapy division which includes the production facility located at 350 Hills Street, Suite 106, Richland, WA 99352 where it leased approximately 15,300 square feet of office and manufacturing space for approximately $25,900 per month plus approximately $440 per month for janitorial services.

In 2017, the Company purchased approximately 4.2 acres of land in Richland, WA in anticipation of constructing a facility for its discontinued brachytherapy operations. Due to the divestiture of the brachytherapy operations, the Company intends to dispose of this land in the future.

The Company’s management believes that the facilities currently occupied by the Company are adequate for present requirements, and that the Company’s current equipment is in good condition and is suitable for the operations involved.

ITEM 3 – LEGAL PROCEEDINGS

The Company may, in the ordinary course of business, be involved in legal proceedings involving securities, contractual and employment relationships, product liability claims, patent rights, environmental matters, and a variety of other matters, the outcomes of which are not within the Company’s complete control and may not be known for extended periods of time. Legal costs associated with defending these matters are expensed as incurred. The Company is only involved in ordinary routine litigation incidental to its business.

On February 14, 2023, the Company was informed by the Office of the United States Attorney for the Northern District of California (the “Office”) that the Office is investigating whether the Company’s payments to its former medical director may have violated the False Claims Act and the Anti-Kickback Statute. From February 2006 until September 2022, the Company engaged a physician to serve as its medical director. The physician was the head of a physician practice that was a top customer of the Company. As medical director, the physician advised the Company’s Board of Directors and management, provided technical advice related to product development and research and development, provided internal training to the Company’s sales staff and provided professional training to the Company’s sales staff and to other physicians, among other things. The letter invited the Company to produce documents voluntarily or receive a civil investigative demand requiring the production of documents. The Company promptly commenced an internal review of the matter, and its review is ongoing. In mid-April 2023, the Company voluntarily produced documents in response to the Office’s request.

On July 17, 2023, the Company was informed by the California Department of Insurance (the “CA DOI”) that the CA DOI is conducting a substantially similar investigation to the one undertaken by the Office. The CA DOI requested the same materials the Company previously provided to the Office, and the Company complied with this request.

On September 18, 2023, the Office informed the Company that there was a qui tam action underlying its investigation, and that the Office had declined to intervene in that action, and that the CA DOI similarly would not pursue any action against the Company regarding those same qui tam allegations. The qui tam action was originally filed on October 11, 2022, and unsealed on or about August 11, 2023.

On November 8, 2023, the complainant filed a notice to dismiss the complaint without prejudice; that notice stated that both the United States and the State of California would consent to dismissal without prejudice. In January 2024, the court granted the dismissal without prejudice.

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ITEM 4 –MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5 – MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

The Company’s common stock is listed on the NYSE American under the symbol “CATX” and as of March 22, 2024, there were 586,915,977 shares outstanding.

Holders

As of March 22, 2024, there were approximately 243 common stockholders of record. The number of common stockholders was determined from the records of our stock transfer agent and does not reflect persons or entities that hold their shares in nominee or “street” name through various brokerage firms.

Dividends

The Company has never paid cash dividends on its common stock and does not plan to pay cash dividends on its common stock in the foreseeable future. Our Board of Directors anticipates that any earnings that might be available to pay dividends will be retained to finance operations.

Securities Authorized for Issuance Under Equity Compensation Plans

The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Form 10-K.

Performance Graph

As a smaller reporting company, the Company is not required to provide a performance graph.

Recent Sales of Unregistered Securities

Our sales of unregistered securities have been previously reported in our reports on Forms 8-K and 10-Q.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

ITEM 6 – [RESERVED]

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ITEM 7 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes appearing at the end of this Annual Report on Form10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form10-K, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. You should read “Cautionary Note Regarding Forward-Looking Statements” and Item1A. Risk Factors of this Annual Report on Form10-K ("Annual Report" or "Form 10-K") for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

General Presentation

This Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) generally discusses year-to-year comparisons between the year ended December 31, 2023 and the comparative year ended December 31, 2022. Due to our change in fiscal year from June 30 to December 31, the comparative year ended December 31, 2022 was unaudited. A discussion of the changes in our financial condition and results of operations for the six-month transition period ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021, has been omitted from this report, but may be found in Item 7, MD&A, of our Annual Reports on Form 10-KT for the six months ended December 31, 2022 and Form 10-K for the year ended June 30, 2022, filed with the Securities and Exchange Commission ("SEC") on May 1, 2023 and September 28, 2022, respectively, which are available free of charge on the SEC’s website at www.sec.gov.

Overview

We are developing the next generation of precision-targeted alpha therapies (“TAT”) for oncology that have the potential to treat a large population of cancer patients across multiple tumor types, including those with metastatic disease. By leveraging our proprietary TAT platform, we aim to develop alpha-emitting radiopharmaceuticals that can be attached to targeting peptides to deliver the radioactive payload directly to difficult-to-treat tumors. The foundation of our TAT platform is our Pb-specific chelator ("PSC") and peptide linker technology, which is designed to enable us to connect our alpha-emitting isotope of choice, Lead-212 (“212Pb” or “Pb-212”), to a desired targeting peptide to deliver radiation directly to cancer cells. Unlike commercially available chelators and linkers, our proprietary PSC and peptide linker have shown, in preclinical studies, the differentiated ability to promote enhanced clearance of the non-tumor localized 212Pb payload without sacrificing the uptake of the alpha particle into the tumor. Rapid clearance of the alpha-emitting isotope from normal tissues is important to enhance tolerability and widen the therapeutic window of our program candidates. We are also developing complementary diagnostics that utilize the same targeting peptide and imaging isotopes such as Lead-203 (“203Pb” or “Pb-203”), Gallium-68 (“68Ga” or “Ga-68”), or Copper-64 (“64Cu” or “Cu-64”) to provide the opportunity to understand which patients may respond to targeted therapy.

Our platform generates TATs that are comprised of three components: (i) a targeting peptide that is designed to selectively target ligands that are unique to, or preferentially expressed on, cancer cells throughout the body; (ii) the alpha-emitting medical isotope 212Pb designed to kill cancer cells; and (iii) our proprietary linker that attaches the targeting molecule to the radioactive payload.

We utilized our TAT platform to discover, design and develop our initial programs, VMT-α-NET and VMT01, which are currently in ongoing Phase 1 clinical trials, and we plan to continue to leverage our platform to assess the potential of and develop multiple additional pipeline programs. Using our proprietary platform technology, VMT-α-NET and VMT01 are engineered to target cancer-specific receptors on tumor cells. [212Pb]VMT-α-NET is a TAT in development for patients with unresectable or metastatic somatostatin receptor type 2 ("SSTR2")-expressing tumors who have not previously received peptide-targeted radiopharmaceutical therapy, such as Lutathera. [212Pb]VMT01 is a TAT in development for second-line or later treatment of patients with progressive MC1R-positive metastatic melanoma.

We have had recurring losses since inception. We expect our expenses to increase in connection with our ongoing activities, particularly as we advance and expand preclinical activities, clinical trials and potential commercialization of our product candidates. Our costs will also increase as we:

● continue the development of our other program candidates;

● hire additional clinical, medical and development personnel.

As of December 31, 2023, we had cash and cash equivalents of $9.2 million. We believe our cash and cash equivalents, including the cash we raised through the Lantheus Investment Agreement, the January 2024 Public Offering and the March 2024 Private Placement will be sufficient to fund our operations for at least the next 12 months from the date the consolidated financial statements in this report were issued and into 2026. For additional information regarding the cash we raised, see "- Liquidity and Capital Resources - Sources of Liquidity" below and Note 20, Subsequent Events in this Form 10-K. Monthly operating expenses are budgeted to increase for research and development and general and administrative expenses in fiscal year 2024 as management works to implement its strategy to advance its two clinical assets, VMT01 and VMT-α-NET, in their clinical trials and to progress its preclinical assets towards clinical trials. Management anticipates a significant increase of expenses, particularly in research and development, as it undertakes these activities in fiscal year 2024.

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On February 3, 2023, we completed the merger of Isoray Acquisition Corp., a Delaware corporation and our wholly owned subsidiary, with Viewpoint Molecular Targeting, Inc. (“Viewpoint”) (such transaction being the “Merger”). Pursuant to the Merger, we issued 136,545,075 shares of common stock, representing approximately 49% of our fully diluted outstanding capital stock. Viewpoint is an alpha-particle radiopharmaceutical company in the alpha-emitter market developing oncology therapeutics and complementary imaging agents.

For a more detailed summary of the Merger, see our Forms 8-K filed with the Securities and Exchange Commission (“SEC”) on September 28, 2022, and on February 6, 2023, and our Form 8-K/A filed with the SEC on April 21, 2023, which are available free of charge on the SEC’s website at www.sec.gov.

Historically, we operated a brachytherapy division and since the Merger, we now operate as a radiopharmaceutical development division. On December 7, 2023, we entered into an Asset Purchase Agreement (the “GT Medical APA”) with Isoray and GT Medical Technologies, Inc. (“GT Medical”).