Item 1A. Risk Factors.
An investment in our securities involves a high
degree of risk. You should consider carefully all of the material risks described below, together with the other information contained
in this Form 10-K. If any of the following events occur, our business, financial condition, results of operations and cash flows may be
materially adversely affected.
Risks Related to the Company’s Business and Industry
Our future success depends on our ability to identify, acquire or
license new drug candidates, and we may not be successful in doing so.
A key element of our business strategy is to expand
our pipeline by acquiring or licensing rights to additional drug candidates from third parties. The success of this strategy depends on
our ability to identify, evaluate and acquire or license suitable drug candidates on commercially reasonable terms. Competition for attractive
drug candidates is intense, and many of our competitors have substantially greater financial, technical and human resources than we do,
which may limit our ability to identify and acquire promising therapeutic assets.
We may not be able to identify drug candidates
that meet our strategic criteria or that we believe have sufficient probability of clinical and commercial success. Even if we identify
promising candidates, we may not be able to negotiate acquisition or licensing terms that are acceptable to us, or we may be outbid by
competitors with greater resources. Additionally, due diligence evaluations of potential acquisition or licensing targets may not reveal
all relevant risks, liabilities or issues, and we may acquire or license drug candidates that ultimately prove to be less valuable or
more problematic than anticipated.
If we are unable to successfully identify and acquire
or license new drug candidates, our pipeline may remain limited, which could materially and adversely affect our business, financial condition,
results of operations and prospects.
Any drug candidates we acquire or license may require significant
additional development, and there can be no assurance that such candidates will prove to be safe, effective or commercially viable.
Even if we are successful in acquiring or licensing
new drug candidates, such candidates will likely require substantial additional investment and development before they could potentially
receive regulatory approval and be commercialized. Drug development is inherently risky and uncertain. Many drug candidates fail to demonstrate
adequate safety or efficacy in clinical trials, and there can be no assurance that any drug candidate we acquire or license will be successfully
developed, receive regulatory approval or achieve commercial success.
In addition, drug candidates we acquire or license
may have unknown liabilities, intellectual property defects or other issues that were not identified during our due diligence evaluation.
We may also face challenges integrating newly acquired or licensed assets into our organization and development programs. Any of these
factors could result in significant delays, increased costs or failure of our development programs, which could materially and adversely
affect our business, financial condition and results of operations.
We may not have access to sufficient capital to pursue acquisition
or licensing opportunities, which could limit our ability to expand our pipeline.
Acquiring or licensing drug candidates often requires
significant upfront payments, milestone payments, royalty obligations and ongoing development costs. As a clinical-stage company with
limited financial resources, we may not have access to sufficient capital to pursue attractive acquisition or licensing opportunities
when they arise. Our ability to raise additional capital may be limited by market conditions, investor sentiment, our financial performance
and other factors beyond our control.
If we are unable to raise sufficient capital on
acceptable terms, we may be forced to forgo attractive acquisition or licensing opportunities, reduce the scope of our business development
activities or delay or discontinue development of drug candidates we have already acquired. Any of these outcomes could limit our ability
to expand our pipeline and materially harm our business and prospects.
We will require substantial funding to execute our new corporate
strategy, which may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce
or cease our operations.
We have primarily used the proceeds from our previous
financings to, among other uses, advance Berubicin through clinical development. In addition, we used proceeds from our previous financings
to obtain the rights to TPI 287. Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is
expensive.
Under our new corporate strategy, we will seek to obtain
rights to new investigational product candidates, which could include upfront cash payments, milestone payments, royalties, issuing shares
of our stock, assuming liabilities or a combination of any of these considerations. It is possible that any of these considerations may
be greater than our currently available resources and require that we undertake additional financings or issue additional equity or debt
securities. We are also evaluating TPI 287 and Berubicin as we explore the potential out-licensing of these programs but there can be
no assurances that we will be able to successfully complete an out-licensing transaction. Potential licensors may require additional preclinical
or clinical data, CMC data, intellectual property or other considerations before undertaking a transaction. We may determine that the
generation of additional preclinical or clinical data, CMC data or new intellectual property is not feasible or cost prohibitive relative
to potential financial considerations we could potentially receive and we may instead elect to sunset TPI 287, Berubicin or both programs.
We will continue to require substantial additional
capital to execute in-licensing to expand our pipeline, clinical development and commercialization activities. Because successful development
of our product candidates is uncertain, we are unable to estimate the actual amount of funding we will require to complete research and
development and commercialize our products under development.
We estimate that we have sufficient capital to
fund operations into the third quarter of 2026. We have no commitments for such additional needed financing and will likely be required
to raise such financing through the sale of additional equity or debt securities.
The amount and timing of our future funding requirements
will depend on many factors, including but not limited to:
· the cost to obtain the rights to new assets;
· whether any clinical trials will be completed on a timely basis;
· market acceptance of our product candidates;
· our ability to out-license TPI 287 or Berubicin;
· the effect of competing drug candidates and new product approvals;
Some of these factors are outside of our control.
We may seek additional funding through a combination of equity offerings, debt financings, government or other third-party funding, commercialization,
marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements. Additional funding may
not be available to us on acceptable terms or at all. In addition, the terms of any financing may adversely affect the holdings or the
rights of our stockholders.
If we are unable to obtain funding on a timely
basis, we may not be able to execute on our in-licensing focused strategy. We also could be required to seek funds through arrangements
with collaborative partners or otherwise that may require us to relinquish rights to some of our technologies or product candidates or
otherwise agree to terms unfavorable to us.
The report of our independent registered public accounting firm
expresses substantial doubt about our ability to continue as a going concern. Such “going concern” opinion could impair our
ability to obtain financing.
Our auditors have indicated in their report on
our financial statements for the fiscal year ended December 31, 2025 that conditions exist that raise substantial doubt about our ability
to continue as a going concern due to our recurring losses from operations. A “going concern” opinion could impair our ability
to finance our operations through the sale of equity, incurring debt, or other financing alternatives. Our ability to continue as a going
concern will depend upon the availability and terms of future funding. If we are unable to achieve this goal, our business would be jeopardized
and we may not be able to continue. If we ceased operations, it is likely that all of our investors would lose their investment.
We have never been profitable, we have no products approved for
commercial sale, and we have not generated any revenue from product sales. As a result, our ability to reduce our losses and reach profitability
is unproven, and we may never achieve or sustain profitability. Therefore, we may not be able to continue as a going concern.
We have never been profitable and do not expect
to be profitable in the foreseeable future. We have not yet submitted any drug candidates for approval by regulatory authorities in the
United States or elsewhere. Our ability to continue as a going concern is dependent upon our generating cash flow from sales that are
sufficient to fund operations or finding adequate financing to support our operations. To date, we have had no revenues and have relied
on equity-based financing from the sale of securities in public and private placements. The continuation of the Company as a going concern
is dependent upon our ability to obtain necessary equity or debt financing to continue operations and the attainment of profitable operations.
As of December 31, 2025 the Company has incurred an accumulated deficit of $100,275,268 since inception and had not yet generated any
revenue from operations. Additionally, management anticipates that its cash on hand as of December 31, 2025, combined with capital raised
subsequent to December 31, 2025, is sufficient to fund its planned operations within one year after the date that the financial statements
are issued.
To date, we have devoted most of our financial
resources to corporate overhead, preparing for and conducting the clinical trial and marketing of our securities. We have not generated
any revenues from product sales. We expect to continue to incur losses for the foreseeable future, and we expect these losses to increase
as we in-license and initiate development of and seek regulatory approvals for new assets or programs, prepare for and begin the commercialization
of any approved products, and add infrastructure and personnel to support our continuing product development efforts. We anticipate that
any such losses could be significant for the next several years. If any of our future drug candidates fail in clinical trials or do not
gain regulatory approval, or if our drug candidates do not achieve market acceptance, we may never become profitable. As a result of the
foregoing, we expect to continue to experience net losses and negative cash flows for the foreseeable future. These net losses and negative
cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital.
Because of the numerous risks and uncertainties
associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or
when, or if, we will be able to achieve profitability. In addition, our expenses could increase if we are required by the FDA to perform
studies or trials in addition to those currently expected, or if there are any delays in completing our clinical trials or the development
of any of our drug candidates. The amount of future net losses will depend, in part, on the rate of future growth of our expenses and
our ability to generate revenues.
We have a limited operating history and we expect a number of factors
to cause our operating results to fluctuate on an annual basis, which may make it difficult to predict our future performance.
We are a clinical pharmaceutical company with limited
operating history. Our operations to date have been limited to acquiring our technology portfolio, preparing for and conducting our clinical
trials. We have not yet obtained any regulatory approvals for any of our drug candidates. Consequently, any predictions made about our
future success or viability may not be as accurate as they could be if we had a longer operating history or approved products on the market.
Our operating results are expected to significantly fluctuate from quarter to quarter or year to year due to a variety of factors, many
of which are beyond our control. Factors relating to our business that may contribute to these fluctuations include:
· any delays or inability to conduct preclinical studies;
· delays in the commencement, enrollment and timing of clinical trials;
· difficulties in identifying patients suffering from our target indications;
· the success of our clinical trials through all phases of clinical development;
· our ability to obtain additional funding to develop drug candidates;
· competition from existing products or new products that continue to emerge;
· potential product liability claims.
These factors are our best estimates of possible
factors but cannot be considered a complete recitation of possible factors that could affect the Company. Accordingly, the results of
any historical quarterly or annual periods should not be relied upon as indications of future operating performance.
We cannot be certain that any of our future product candidates will
receive regulatory approval, and without regulatory approval we will not be able to market or commercialize them.
Our business strategy depends on identifying and in
licensing the rights to new assets focused on neurology and oncology. There can be no assurances that we will be successful in executing
on our strategy, which could have a material adverse impact on our business. Even if we are successful in securing rights to new assets,
the development pathway to approval may be long, have uncertainty, and require more resources than we are able to obtain. Our ability
to generate revenue related to product sales, if ever, will depend on the successful development and regulatory approval of any future
product candidates.
We currently have no products approved for sale
and we cannot guarantee that we will ever have marketable products. The development of a product candidate and issues relating to its
approval and marketing are subject to extensive regulation by the FDA in the United States and regulatory authorities in other countries,
with regulations differing from country to country. We are not permitted to market our product candidates in the United States until we
receive approval of an NDA from the FDA. We have not submitted any marketing applications for any of our product candidates.
NDAs must include extensive preclinical and clinical
data and supporting information to establish the product candidate’s safety and effectiveness for each desired indication. NDAs
must also include significant information regarding the chemistry, manufacturing and controls for the product. Obtaining approval of an
NDA is a lengthy, expensive, and uncertain process, and we may not be successful in obtaining approval. The FDA review processes can take
years to complete, and approval is never guaranteed. If we submit an NDA to the FDA, the FDA must decide whether to accept or reject the
submission for filing. We cannot be certain that any submissions will be accepted for filing and review by the FDA. Regulators in other
jurisdictions have their own procedures for approval of product candidates. Even if a product is approved, the FDA may limit the indications
for which the product may be marketed, require extensive warnings on the product labeling or require expensive and time-consuming clinical
trials or reporting as conditions of approval. Regulatory authorities in countries outside of the United States and Europe also have requirements
for approval of drug candidates with which we must comply with prior to marketing in those countries. Obtaining regulatory approval for
marketing of a product candidate in one country does not ensure that we will be able to obtain regulatory approval in any other country.
In addition, delays in approvals or rejections of marketing applications in the United States, Europe or other countries may be based
upon many factors, including regulatory requests for additional analyses, reports, data, preclinical studies and clinical trials, regulatory
questions regarding different interpretations of data and results, changes in regulatory policy during the period of product development
and the emergence of new information regarding our product candidates or other products. Also, regulatory approval for any of our product
candidates may be withdrawn.
If we are unable to obtain approval from the FDA,
or other regulatory agencies, for our product candidates, or if, subsequent to approval, we are unable to successfully commercialize our
product candidates or secure commercialization partners, we will not be able to generate sufficient revenue to become profitable or to
continue our operations, likely resulting in the total loss of principal for our investors.
Any statements in this filing indicating that our legacy
assets TPI 287 and Berubicin have demonstrated preliminary evidence of efficacy are our own and are not based on the FDA’s or any
other comparable governmental agency’s assessment of TPI 287 and Berubicin and do not indicate that TPI 287 and Berubicin will achieve
favorable efficacy results in any later stage trials or that the FDA or any comparable agency will ultimately determine that TPI 287 and
Berubicin is effective for purposes of granting marketing approval. Based on our intention to explore out-licensing TPI 287 and Berubicin,
we may have limited or no ability to determine the future development or regulatory activity for these programs.
Delays in the commencement, enrollment and completion of clinical
trials could result in increased costs to us and delay or limit our ability to obtain regulatory approval for our product candidates.
Delays in the commencement, enrollment and completion
of clinical trials could increase our product development costs or limit the regulatory approval of our product candidates. We do not
know whether any future trials or studies of our other product candidates will begin on time or will be completed on schedule, if at all.
The start or end of a clinical study is often delayed or halted due to changing regulatory requirements, manufacturing challenges, including
delays or shortages in available drug product, required clinical trial administrative actions, slower than anticipated patient enrollment,
changing standards of care, availability or prevalence of use of a comparative drug or required prior therapy, clinical outcomes or financial
constraints. For instance, delays or difficulties in patient enrollment or difficulties in retaining trial participants can result in
increased costs, longer development times or termination of a clinical trial. Clinical trials of a new product candidate require the enrollment
of a sufficient number of patients, including patients who are suffering from the disease the product candidate is intended to treat and
who meet other eligibility criteria. The rates of patient enrollment are affected by many factors, including the size of the patient population,
the eligibility criteria for the clinical trial, that include the age and condition of the patients and the stage and severity of disease,
the nature of the protocol, the proximity of patients to clinical sites and the availability of effective treatments and/or availability
of investigational treatment options for the relevant disease.
A product candidate can unexpectedly fail at any
stage of preclinical and clinical development. The historical failure rate for product candidates is high due to scientific feasibility,
safety, efficacy, changing standards of medical care and other variables. The results from preclinical testing or early clinical trials
of a product candidate may not predict the results that will be obtained in later phase clinical trials of the product candidate. We,
the FDA or other applicable regulatory authorities may suspend clinical trials of a product candidate at any time for various reasons,
including, but not limited to, a belief that subjects participating in such trials are being exposed to unacceptable health risks or adverse
side effects, or other adverse initial experiences or findings. We may not have the financial resources to continue development of, or
to enter into collaborations for, a product candidate if we experience any problems or other unforeseen events that delay or prevent regulatory
approval of, or our ability to commercialize, product candidates, including, but not limited to:
· inability to obtain sufficient funds required for a clinical trial;
· high dropout rates and high fail rates of research subjects;
· greater than anticipated clinical trial costs;
· poor effectiveness of our product candidates during clinical trials; or
We have never completed a clinical trial or submitted an NDA before,
and any product candidate we advance through clinical trials may not have favorable results in later clinical trials or receive regulatory
approval.
Clinical failure can occur at any stage of our
clinical development. Clinical trials may produce negative or inconclusive results, and our collaborators or we may decide, or regulators
may require us, to conduct additional clinical trials or nonclinical studies. In addition, data obtained from trials and studies are susceptible
to varying interpretations, and regulators may not interpret our data as favorably as we do, which may delay, limit, or prevent regulatory
approval. Success in preclinical studies and early clinical trials does not ensure that subsequent clinical trials will generate the same
or similar results or otherwise provide adequate data to demonstrate the efficacy and safety of a product candidate. Many companies in
the pharmaceutical industry, including those with greater resources and experience than us, have suffered significant setbacks in clinical
trials, even after seeing promising results in earlier clinical trials.
In addition, the design of a clinical trial can
determine whether its results will support approval of a product and flaws in the design of a clinical trial may not become apparent until
the clinical trial is well advanced. We may be unable to design and execute a clinical trial to support regulatory approval. Further,
clinical trials of potential products often reveal that it is not practical or feasible to continue development efforts.
If a future product candidate is found to be unsafe or ineffective,
we will not be able to obtain regulatory approval for it and our business would be materially and possibly irreparably harmed.
In some instances, there can be significant variability
in safety and/or efficacy results between different trials of the same product candidate due to numerous factors, including changes in
trial protocols, differences in composition of the patient populations, adherence to the dosing regimen and other trial protocols and
the rate of dropout among clinical trial participants. We do not know whether any clinical trials we or any of our potential future collaborators
may conduct will demonstrate the consistent or adequate efficacy and safety that would be required to obtain regulatory approval and market
any products. If we are unable to bring any of our future product candidates to market, or to acquire other products that are on the market
or can be developed, our ability to create long-term stockholder value will be limited.
Interim or preliminary data from our clinical trials that we announce
or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that
could result in material changes in the final data.
We may publicly disclose preliminary data from
our clinical trials, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions
are subject to change following a full analysis of all data related to the particular trial. We also make assumptions, estimations, calculations,
and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all
data. As a result, the preliminary results that we report may differ from future results of the same trials, or different conclusions
or considerations may qualify such results once additional data have been received and fully evaluated. Preliminary data also remain subject
to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously
published. As a result, preliminary data should be viewed with caution until the final data are available. We may also disclose interim
data from our clinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the
clinical outcomes may materially change as patient enrollment continues and more patient data become available. Adverse differences between
preliminary or interim data and final data could significantly harm our business prospects. Further, disclosure of preliminary or interim
data by us could result in volatility in the price of shares of our common stock.
In addition, others, including regulatory agencies,
may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance
of data differently, which could impact the approvability of the particular drug candidate and our business in general. In addition, the
information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information,
and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure,
and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views,
activities or otherwise regarding a particular drug candidate or our business. If the interim data that we report differ from actual results,
or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for and commercialize
our current or any our future drug candidate, our business, operating results, prospects or financial condition may be materially harmed.
Our product candidates may have undesirable side effects that may
delay or prevent marketing approval, or, if approval is received, require them to be taken off the market, require them to include safety
warnings or otherwise limit their sales.
Unforeseen side effects from any of our product
candidates could arise either during clinical development or after an approved product has been marketed. The range and potential severity
of possible side effects from therapies for neurologic or cancer indications can be significant. If any of our product candidates causes
undesirable or unacceptable side effects in the future, this could interrupt, delay or halt clinical trials and result in the failure
to obtain or suspension or termination of marketing approval from the FDA and other regulatory authorities, or result in marketing approval
from the FDA and other regulatory authorities only with restrictive label warnings.
If any of our product candidates receives marketing
approval and we or others later identify undesirable or unacceptable side effects caused by such products:
· we may be subject to limitations on how we may promote the product;
· sales of the product may decrease significantly;
· we may be subject to litigation or product liability claims; and
· our reputation may suffer.
Any of these events could prevent us or our potential
future collaborators from achieving or maintaining market acceptance of the affected product or could substantially increase commercialization
costs and expenses, which in turn could delay or prevent us from generating significant revenues from the sale of our products.
If the FDA does not find the manufacturing facilities of our future
contract manufacturers acceptable for commercial production, we may not be able to commercialize any of our product candidates, or such
commercialization efforts may be delayed until we can contract with manufacturers with facilities acceptable to the FDA or other regulatory
authorities.
We do not have any manufacturing capabilities and
we do not intend to manufacture the pharmaceutical products that we plan to sell. We utilize contract manufacturers for the production
of the active pharmaceutical ingredients and the formulation of drug product for our pre-clinical development and clinical trials that
we will need to conduct prior to seeking regulatory approval. However, we currently do not have agreements for supplies for any product
candidates and we may not be able to reach agreements with these or other contract manufacturers for sufficient supplies to commercialize
any product, even if they are approved. Additionally, the facilities used by any contract manufacturer to manufacture any of our product
candidates must be the subject of a satisfactory inspection before the FDA approves the product candidate manufactured at that facility.
We will be completely dependent on these third-party manufacturers for compliance with the requirements of U.S. and non-U.S. regulators
for the manufacture of our finished products. If our manufacturers cannot successfully manufacture material that conform to our specifications
and the FDA’s current good manufacturing practice standards, or GMP, and other requirements of any governmental agency whose jurisdiction
to which we are subject, our product candidates will not be approved or, if already approved, may be subject to recalls. Reliance on third-party
manufacturers entails risks to which we would not be subject if we manufactured our product candidates, including:
Any of these factors could cause the delay of approval
or commercialization of our product candidates, cause us to incur higher costs or prevent us from commercializing our product candidates
successfully. Furthermore, if any of our product candidates are approved and contract manufacturers fail to deliver the required commercial
quantities of finished product on a timely basis at commercially reasonable prices and we are unable to find one or more replacement manufacturers
capable of production at a substantially equivalent cost, in substantially equivalent volumes and quality and on a timely basis, we would
likely be unable to meet demand for our products and could lose potential revenue. It may take several years to establish an alternative
source of supply for our product candidates and to have any such new source approved by the government agencies that regulate our products.
We have no sales, marketing or distribution experience and we will
have to invest significant resources to develop those capabilities or enter into third-party sales and marketing arrangements, the problems
with which could materially harm our business at any time.
We have no sales, marketing, or distribution experience.
To develop sales, distribution, and marketing capabilities, we will have to invest significant amounts of financial and management resources,
some of which will need to be committed prior to any confirmation that our product candidates will be approved by the FDA. For product
candidates where we decide to perform sales, marketing, and distribution functions ourselves or through third parties, we could face a
number of additional risks, including that we or our third-party sales collaborators may not be able to build and maintain an effective
marketing or sales force. If we use third parties to market and sell our products, we may have limited or no control over their sales,
marketing and distribution activities on which our future revenues may depend.
We may not be successful in establishing and maintaining development
and commercialization collaborations, which could adversely affect our ability to develop certain of our product candidates and our financial
condition and operating results.
Because developing pharmaceutical products, conducting
clinical trials, obtaining regulatory approval, establishing manufacturing capabilities and marketing approved products are expensive,
we may seek to enter into collaborations with companies that have more experience. Additionally, if any of our product candidates receives
marketing approval, we may enter into sales and marketing arrangements with third parties with respect to our unlicensed territories.
If we are unable to enter into arrangements on acceptable terms, if at all, we may be unable to effectively market and sell our products
in our target markets. We expect to face competition in seeking appropriate collaborators. Moreover, collaboration arrangements are complex
and time consuming to negotiate, document and implement and they may require substantial resources to maintain. We may not be successful
in our efforts to establish and implement collaborations or other alternative arrangements for the development of our product candidates.
One or more of our collaboration partners may not
devote sufficient resources to the commercialization of our product candidates or may otherwise fail in their commercialization. The terms
of any collaboration or other arrangement that we establish may contain provisions that are not favorable to us, or the favorability of
which is dependent on conditions that are out of our control or unknowable at the time of execution. In addition, any collaboration that
we enter into may be unsuccessful in the development and commercialization of our product candidates. In some cases, we may be responsible
for continuing preclinical and initial clinical development of a product candidate or research program under a collaboration arrangement,
and the payment we receive from our collaboration partner may be insufficient to cover the cost of this development. If we are unable
to reach agreements with suitable collaborators for our product candidates, we would face increased costs, we may be forced to limit the
number of our product candidates we can commercially develop or the territories in which we commercialize them. As a result, we might
fail to commercialize products or programs for which a suitable collaborator cannot be found. If we fail to achieve successful collaborations,
our operating results and financial condition could be materially and adversely affected.
We face competition from other biotechnology and pharmaceutical
companies and our operating results will suffer if we fail to compete effectively.
The biotechnology and pharmaceutical industries
are intensely competitive and subject to rapid and significant technological change. We have competitors in the United States, Europe,
and other jurisdictions, including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical
and generic drug companies and universities and other research institutions. Many of our competitors have greater financial and other
resources, such as larger research and development staff and more experienced marketing and manufacturing organizations than we do. Large
pharmaceutical companies, in particular, have extensive experience in clinical testing, obtaining regulatory approvals, recruiting patients
and manufacturing pharmaceutical products. These companies also have significantly greater research, sales and marketing capabilities
and collaborative arrangements in our target markets with leading companies and research institutions. Established pharmaceutical companies
may also invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make the
product candidates that we develop obsolete. As a result of all of these factors, our competitors may succeed in obtaining patent protection
and/or FDA approval or discovering, developing and commercializing drugs for the diseases that we are targeting before we do or may develop
drugs that are deemed to be more effective or gain greater market acceptance than ours. Smaller or early-stage companies may also prove
to be significant competitors, particularly through collaborative arrangements with large, established companies. In addition, many universities
and private and public research institutes may become active in our target disease areas. Our competitors may succeed in developing, acquiring,
or licensing on an exclusive basis, technologies and drug products that are more effective or less costly than any of our product candidates
that we are currently developing or that we may develop, which could render our products obsolete or noncompetitive.
If our competitors market products that are more
effective, safer or less expensive or that reach the market sooner than our future products, if any, we may not achieve commercial success.
In addition, because of our limited resources, it may be difficult for us to stay abreast of the rapid changes in each technology. If
we fail to stay at the forefront of technological change, we may be unable to compete effectively. Technological advances or products
developed by our competitors may render our technologies or product candidates obsolete, less competitive or not economical.
Our licensed U.S. patents for Berubicin have expired and our licensed
U.S. patents for TPI 287 will expire before commercialization is reasonably possible, and the expiration of our patents may subject us
to increased competition, and the Orphan Drug Designations for TPI 287 and Berubicin will not bar approval of other similar products under
certain circumstances.
The current U.S. and foreign patents for TPI 287 will
all expire in 2028 well before commercialization is reasonably possible. TPI 287 held Orphan Drug Designation when we licensed it from
Cortice and on June 10, 2020, the FDA granted Orphan Drug Designation for Berubicin for the treatment of malignant gliomas. ODD from the
FDA is available for drugs targeting diseases with less than 200,000 cases per year. ODD may enable market exclusivity of 7 years from
the date of approval of an NDA in the United States. During that period the FDA generally could not approve another product containing
the same drug for the same designated indication. Orphan drug exclusivity will not bar approval of another product under certain circumstances,
including if a subsequent product with the same active ingredient for the same indication is shown to be clinically superior to the approved
product on the basis of greater efficacy or safety, or providing a major contribution to patient care, or if the company with orphan drug
exclusivity is not able to meet market demand. The ODD now constitutes our primary intellectual property protections although we are exploring
if there are other patents that could be filed related to Berubicin to extend additional protections. The ODD similarly strengthens our
TPI 287 patent protections and would become our primary protection upon expiration of those patents, however, we are also exploring new
patent opportunities related to TPI 287 and Berubicin. Nevertheless, we can provide no assurance that we will be able to file
or receive additional patent protection. The failure to obtain additional patent protection will reduce the barrier to entry for competition
for TPI 287 or Berubicin, which may adversely affect our operations.
We may incur substantial costs as a result of litigation or other
proceedings relating to patent and other intellectual property rights.
We may from time to time seek to enforce our intellectual
property rights against infringers when we determine that a successful outcome is probable and may lead to an increase in the value of
the intellectual property. If we choose to enforce our patent rights against a party, then that individual or company has the right to
ask the court to rule that such patents are invalid or should not be enforced. Additionally, the validity of our patents and the patents
we have licensed may be challenged if a petition for post grant proceedings such as interpartes review and post grant review is filed
within the statutorily applicable time with the U.S. Patent and Trademark Office (USPTO). These lawsuits and proceedings are expensive
and would consume time and resources and divert the attention of managerial and scientific personnel even if we were successful in stopping
the infringement of such patents. In addition, there is a risk that the court will decide that such patents are not valid and that we
do not have the right to stop the other party from using the inventions. There is also the risk that, even if the validity of such patents
is upheld, the court will refuse to stop the other party on the ground that such other party’s activities do not infringe our intellectual
property rights. In addition, in recent years the U.S. Supreme Court modified some tests used by the USPTO in granting patents over the
past 20 years, which may decrease the likelihood that we will be able to obtain patents and increase the likelihood of a challenge of
any patents we obtain or license.
We may be subject to claims that our employees and contractors have
wrongfully used or disclosed alleged trade secrets of their former employers.
As is common in the biotechnology and pharmaceutical
industries, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies, including our competitors
or potential competitors. We may be subject to claims that these employees, or we, have used or disclosed trade secrets or other proprietary
information of their former employers. Litigation may be necessary to defend against these claims. Even if we are successful in defending
against these claims, litigation could result in substantial costs and be a distraction to management.
If we are not able to adequately prevent disclosure of trade secrets
and other proprietary information, the value of our technology and products could be significantly diminished.
We rely on trade secrets to protect our proprietary
technologies, especially where we do not believe patent protection is appropriate or obtainable. However, trade secrets are difficult
to protect. We rely in part on confidentiality agreements with our employees, consultants, outside scientific collaborators, and other
advisors to protect our trade secrets and other proprietary information. These agreements may not effectively prevent disclosure of confidential
information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others
may independently discover our trade secrets and proprietary information. Costly and time-consuming litigation could be necessary to enforce
and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our
competitive business position.
We will need to expand our operations and increase the size of our
Company, and we may experience difficulties in managing growth.
As of March 31, 2026, we have eight full-time employees.
As we secure rights to and advance product candidates through preclinical studies and clinical trials, we will need to increase our product
development, scientific and administrative headcount to manage these programs. In addition, to meet our obligations as a public company,
we may need to increase our general and administrative capabilities. Our management, personnel, and systems currently in place may not
be adequate to support this future growth. If we are unable to successfully manage this growth and increased complexity of operations,
our business may be adversely affected.
We may not be able to manage our business effectively if we are
unable to attract and retain key personnel and consultants.
We may not be able to attract or retain qualified
management, finance, scientific and clinical personnel, and consultants due to the intense competition for qualified personnel and consultants
among biotechnology, pharmaceutical and other businesses. If we are not able to attract and retain necessary personnel and consultants
to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development
objectives, our ability to raise additional capital.
We are highly dependent on the development, regulatory,
commercialization and business development expertise of our management team, key employees, and consultants. If we lose one or more of
our executive officers or key employees or consultants, our ability to implement our business strategy successfully could be seriously
harmed. Any of our executive officers or key employees or consultants may terminate their employment at any time. Replacing executive
officers, key employees and consultants may be difficult and may take an extended period of time because of the limited number of individuals
in our industry with the breadth of skills and experience required to develop, gain regulatory approval of and commercialize products
successfully. Competition to hire and retain employees and consultants from this limited pool is intense, and we may be unable to hire,
train, retain or motivate these additional key personnel and consultants. Our failure to retain key personnel or consultants could materially
harm our business.
In addition, we have scientific and clinical advisors
and consultants who assist us in formulating our research, development, and clinical strategies. These advisors are not our employees
and may have commitments to, or consulting or advisory contracts with, other entities that may limit their availability to us and typically
they will not enter into noncompete agreements with us. If a conflict of interest arises between their work for us and their work for
another entity, we may lose their services. In addition, our advisors may have arrangements with other companies to assist those companies
in developing products or technologies that may compete with ours.
We do not expect that our insurance policies will cover all of our
business exposures thus leaving us exposed to significant uninsured liabilities.
We do not carry insurance for all categories of
risk that our business may encounter. There can be no assurance that we will secure adequate insurance coverage or that any such insurance
coverage will be sufficient to protect our operations to significant potential liability in the future. Any significant uninsured liability
may require us to pay substantial amounts, which would adversely affect our financial position and results of operations.
Although dependent on certain key personnel, we do not have any
key man life insurance policies on any such people.
We are dependent on our executive leadership team:
Rami Levin, Eric Faulkner, Lynne Kelley, Steve O’Loughlin and Dylan Wenke in order to conduct our operations and execute our business
plan, however, we have not purchased any insurance policies with respect to those individuals in the event of their death or disability.
Therefore, if any of our current executives die or become disabled, we will not receive any compensation to assist with such person’s
absence. The loss of such person could negatively affect us and our operations.
There may be limited suppliers for active pharmaceutical ingredients
(“API”) used in our drug candidates. Problems with the third parties that manufacture the API used in our drug candidates,
or in the supply chain between the manufacturer and CNS, may delay our clinical trials or subject us to liability.
We do not currently own or operate manufacturing
facilities for clinical or commercial production of the API used in any of our drug candidates. We have no experience in API manufacturing,
and we lack the resources and the capability to manufacture any of the APIs used in our drug candidates, on either a clinical or commercial
scale. As a result, we rely on third parties to supply the API used in each of our drug candidates and commercial couriers to deliver
the manufactured API to us. We expect to continue to depend on third parties to supply the API for our current and future product candidates
and to supply the API in commercial quantities. We are ultimately responsible for confirming that the APIs used in our product candidates
are manufactured in accordance with applicable regulations.
Our third-party suppliers and couriers may not
carry out their contractual obligations or meet our deadlines. In addition, the API they supply to us may not meet our specifications
and quality policies and procedures or they may not be able to supply the API in commercial quantities. If we need to find alternative
suppliers for the API used in any of our product candidates, we may not be able to contract for such supplies on acceptable terms, if
at all. Any such failure to supply or delay caused by such contract manufacturers or couriers would have an adverse effect on our ability
to continue clinical development of our product candidates or commercialization of our product candidates.
If our third-party drug suppliers fail to achieve
and maintain high manufacturing standards in compliance with cGMP regulations, we could be subject to certain product liability claims
in the event such failure to comply resulted in defective product that caused injury or harm.
We may not be able to recover from any catastrophic event affecting
our suppliers.
Our suppliers may not have adequate measures in
place to minimize and recover from catastrophic events that may substantially destroy their capability to meet customer needs and any
measures they may have in place may not be adequate to recover production processes quickly enough to support critical timelines or market
demands. These catastrophic events may include weather and geologic events such as tornadoes, earthquakes, floods, tidal waves, volcanic
eruptions, and fires as well as infectious disease epidemics, acts of war, acts of terrorism and nationalization of private industry.
In addition, these catastrophic events may render some or all of the products at the affect facilities unusable.
We may be materially adversely affected in the event of cyber-based
attacks, network security breaches, service interruptions, or data corruption.
We rely on information technology to process and
transmit sensitive electronic information and to manage or support variety of business processes and activities. We use technology systems
to record, process, and summarize financial information and results of operations for internal reporting purposes and to comply with regulatory
financial reporting, legal, and tax requirements. Our information technology systems, some of which are managed by third parties, may
be susceptible to damage, disruptions or shut down student computer viruses, attacks by computer hackers, failures during the process
of upgrading or replacing software, databases or components thereof, power outages, hardware failures, technology for communication failures,
user errors or catastrophic events. Although we have developed systems and processes that are designed to protect proprietary or confidential
information and prevent data loss and other security breaches, such measures cannot provide absolute security. If our systems are breached
or suffer severe damage, disruption or shutdown and we are unable to effectively resolve the issues in a timely manner, our business and
operating results may significantly suffer and we may be subject to litigation, government enforcement actions or potential liability.
Security breaches could also cause us to incur significant remediation costs, result in product development delays, disrupt key business
operations, including development of our product candidates, and divert attention of management and key information technology resources.
Our cash and cash equivalents could be adversely affected if the
financial institutions in which we hold our cash and cash equivalents fail.
We regularly maintain cash balances at third-party
financial institutions. Our cash investment strategy is intended to preserve capital and minimize cash balances that exceed the Federal
Deposit Insurance Corporation, or FDIC, insurance limit. However, our cash balances may exceed the FDIC insurance limit from time to time.
Events involving limitations to liquidity, defaults, non-performance or other adverse developments that affect financial institutions,
or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide
liquidity problems. For example, on March 10, 2023, the FDIC, took control and was appointed receiver of Silicon Valley Bank (to which
the Company had no exposure). If other banks and financial institutions enter receivership or become insolvent in the future in response
to financial conditions affecting the banking system and financial markets, our ability to access our existing cash, cash equivalents
and investments may be threatened and could have a material adverse effect on our business and financial condition.
Risks Related to Our Common Stock
Failure to maintain effective internal control over our financial
reporting in accordance with Section 404 of the Sarbanes-Oxley Act has caused and may cause in the future our financial reports to be
inaccurate.
We are required pursuant to Section 404 of the
Sarbanes-Oxley Act of 2002, or Section 404, to maintain internal control over financial reporting and to assess and report on the effectiveness
of those controls. This assessment includes disclosure of any material weaknesses identified by our management in our internal control
over financial reporting. Our management concluded that our internal controls over financial reporting were, and continue to be, ineffective
as of December 31, 2025, identified a material weakness in our internal controls due to the lack of sufficient personnel to allow for
segregation of duties (resulting from the limited number of personnel available), limited access to timely and complete information regarding
the status of costs incurred in the activation of investigational sites and costs from treating patients in our study which is a result
of the use of a third-party Contract Research Organization (“CRO”) to manage the study, and the lack of formal documentation
of our control environment. While management is working to remediate the material weaknesses, there is no assurance that such changes,
when economically feasible and sustainable, will remediate the identified material weaknesses or that the controls will prevent or detect
future material weaknesses. If we are not able to maintain effective internal control over financial reporting, our financial statements,
including related disclosures, may be inaccurate, which could have a material adverse effect on our business.
Failure to continue improving our accounting systems and controls
could impair our ability to comply with the financial reporting and internal controls requirements for publicly traded companies.
As a public company, we operate in an increasingly
demanding regulatory environment, which requires us to comply with the Sarbanes-Oxley Act of 2002, and the related rules and regulations
of the SEC. Company responsibilities required by the Sarbanes-Oxley Act include establishing corporate oversight and adequate internal
control over financial reporting and disclosure controls and procedures. Effective internal controls are necessary for us to produce reliable
financial reports and are important to help prevent financial fraud.
Management performed an annual assessment as of
December 31, 2025 of the effectiveness of our internal control over financial reporting for its annual report. Our management concluded
that our internal control over financial reporting was, and continues to be, ineffective as of December 31, 2025, due to material weaknesses
in our internal controls due to the lack of segregation of duties (resulting from the limited number of personnel available), limited
access to timely and complete information regarding the status of costs incurred in the activation of investigational sites and costs
from treating patients in our study which is a result of the use of a third-party Contract Research Organization (“CRO”) to
manage the study, and the lack of formal documentation of our control environment. For as long as we remain a smaller reporting company
as defined by Rule 12b-2 of the Exchange Act, we have and intend to consider to take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not a smaller reporting company including, but not limited to, not
being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act. We may continue to take
advantage of these reporting exemptions until we are no longer a smaller reporting company. To mitigate the lack of segregation of duties
material weaknesses, we engaged an outside firm to assist management with such accounting and will continue to use outside firms as a
resource to deal with other non-recurring or unusual transactions. To mitigate the lack of formal documentation of the control environment,
we have key team members review the critical reports and reconciliations as well as reporting documents. To mitigate the limited
access to timely and complete information regarding the status of costs incurred in the activation of investigational sites and costs
from treating patients in the study which is a result of the use of a third-party Contract Research Organization (“CRO”) to
manage the study, we have senior leaders of our finance and research teams review period end estimates. However, notwithstanding
our mitigation efforts, there is no assurance we will not encounter accounting errors in the future. If we cannot provide reliable financial
reports or prevent fraud, our business and results of operations could be harmed, and investors could lose confidence in our reported
financial information.
Our current stockholders’ ownership may be diluted if additional
capital stock is issued to raise capital, to finance acquisitions or in connection with strategic transactions.
We intend to seek to raise additional funds, finance
acquisitions or develop strategic relationships by issuing equity or convertible debt securities, which would reduce the percentage ownership
of our existing stockholders. Our board of directors has the authority, without action or vote of the stockholders, to issue all or any
part of our authorized but unissued shares of common or preferred stock. Our articles of incorporation authorize us to issue up to 300,000,000
shares of common stock and 5,000,000 shares of preferred stock. Future issuances of common or preferred stock would reduce your influence
over matters on which stockholders vote and would be dilutive to earnings per share. In addition, any newly issued preferred stock could
have rights, preferences, and privileges senior to those of the common stock. Those rights, preferences, and privileges could include,
among other things, the establishment of dividends that must be paid prior to declaring or paying dividends or other distributions to
holders of our common stock or providing for preferential liquidation rights. These rights, preferences and privileges could negatively
affect the rights of holders of our common stock, and the right to convert such preferred stock into shares of our common stock at a rate
or price that would have a dilutive effect on the outstanding shares of our common stock.
We have in the past been unable to maintain compliance with the
listing requirements of The Nasdaq Capital Market, and any future failure to maintain compliance could subject our common stock to be
delisted from The Nasdaq Capital Market, which could have a material adverse effect on our financial condition and could make it more
difficult for you to sell your shares.
Our common stock is listed on The Nasdaq Capital
Market, and we are therefore subject to its continued listing requirements, including requirements with respect to the market value of
publicly-held shares, market value of listed shares, minimum bid price per share, and minimum stockholder's equity, among others, and
requirements relating to board and committee independence. If we fail to satisfy one or more of the requirements, we may be delisted from
The Nasdaq Capital Market.
During 2024, we experienced compliance deficiencies
with respect to the requirement to maintain a closing bid price of $1.00 per share (the “Minimum Bid Price Requirement”) pursuant
to Nasdaq Listing Rule 5550(a)(2), and the minimum $2,500,000 stockholders’ equity requirement for continued listing set forth in
Listing Rule 5550(b) (the “Equity Requirement”). We have since remedied these deficiencies and, as of the date of this filing,
we are in compliance with all applicable Nasdaq listing requirements.
Although we are currently
in compliance with all applicable Nasdaq listing requirements, there can be no assurance that we will continue to meet such requirements
in the future, and we could be subject to delisting at a future time. Delisting from The Nasdaq Capital Market would adversely affect
our ability to raise additional financing through the public or private sale of equity securities, may significantly affect the ability
of investors to trade our securities and may negatively affect the value and liquidity of our common stock. Delisting also could have
other negative results, including the potential loss of employee confidence, the loss of institutional investors or interest in business
development opportunities.
We may be required to repurchase certain of our warrants upon a
fundamental transaction, which may prevent or deter a third party from acquiring us.
Certain of our warrants to purchase common stock
provide that in the event of a “Fundamental Transaction” (as defined in the related warrant agreement, which generally includes
any merger with another entity, the sale, transfer or other disposition of all or substantially all of our assets to another entity, or
the acquisition by a person of more than 50% of our common stock), each warrant holder will have the right at any time prior to the consummation
of the Fundamental Transaction to require us to repurchase the warrant for a purchase price in cash equal to the Black-Scholes value (as
calculated under the warrant agreement) of the then remaining unexercised portion of such common warrant on the date of such Fundamental
Transaction, which may materially adversely affect our financial condition and/or results of operations and may prevent or deter a third
party from acquiring us.
General Risk Factors
As a biotechnology company, we may be at an increased risk of securities
class action litigation.
Historically, securities class action litigation
has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for
us because biotechnology and pharmaceutical companies have experienced significant stock price volatility in recent years. If we were
to be sued, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.
If securities or industry analysts do not publish research or reports
about us, or if they adversely change their recommendations regarding our common stock, then our stock price and trading volume could
decline.
The trading market for our common stock will be
influenced by the research and reports that industry or securities analysts publish about us, our industry and our market. If no analyst
elects to cover us and publish research or reports about us, the market for our common stock could be severely limited and our stock price
could be adversely affected. As a small-cap company, we are more likely than our larger competitors to lack coverage from securities analysts.
In addition, even if we receive analyst coverage, if one or more analysts ceases coverage of us or fails to regularly publish reports
on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. If one
or more analysts who elect to cover us issue negative reports or adversely change their recommendations regarding our common stock, our
stock price could decline.