ITEM 1A. RISK FACTORS
We
are providing the following cautionary discussion of risk factors and uncertainties that we believe are relevant to our business. These
are factors that, individually or in the aggregate, we think could cause our actual results to differ materially from expected or historical
results and our forward-looking statements. We note these factors for investors as permitted by Section 21E of the Exchange Act and Section
27A of the Securities Act. You should understand that it is not possible to predict or identify all such factors. Consequently, you should
not consider the following to be a complete discussion of all potential risks or uncertainties that may impact our business. Moreover,
we operate in a competitive and rapidly changing environment. New factors emerge from time to time, and it is not possible to predict
the impact of all of these factors on our business, financial condition, or results of operations. We undertake no obligation to publicly
update forward-looking statements, whether as a result of new information, future events, or otherwise.
Risk
Factors Summary
The
following is a summary of some of the Company’s most important risks and uncertainties that could materially adversely affect our
business, financial condition, and results of operations. You should read this summary together with a more detailed description of each
risk factor. Additional discussion of the risks summarized in this Risk Factors Summary, and other risks that we face, can be found below
under the heading “Risk Factors” and should be carefully considered, together with other information in this Annual Report
on Form 10-K and our other filings with the SEC, before making an investment in our securities.
Risk
Related to Our Business and Operations
● We rely on third parties to conduct all of our clinical trials.
● We may fail to comply with evolving European and other privacy laws.
● We may be subject to significant product liability claims and litigation.
Risks
Related to Intellectual Property
Risks
Related to Our Securities
● The market price of our common stock may be significantly volatile.
RISKS
RELATED TO OUR BUSINESS AND OPERATIONS
We
have a history of significant losses from operations and expect to continue to incur significant losses for the foreseeable future, and
we may never achieve or maintain profitability.
Since
our inception, our expenses have substantially exceeded our revenue, resulting in continuing losses and an accumulated deficit of $421
million at December 31, 2025. For the years ended December 31, 2025 and 2024, we incurred net losses of $14.5 million and $18.6 million,
respectively. We currently have no product revenue and do not expect to generate any product revenue for the foreseeable future. Because
we are committed to continuing our product research, development, clinical trial and commercialization programs, we will continue to
incur significant operating losses unless and until we complete the development of IMNN-001 and other new drug candidates and these drug
candidates have been clinically tested, approved by the FDA and successfully marketed. The amount of future losses is uncertain. Our
ability to achieve profitability, if ever, will depend on, among other things, the following, which we cannot guarantee: us or our collaborators
successfully developing drug candidates, obtaining regulatory approvals to market and commercialize drug candidates, manufacturing any
approved products on commercially reasonable terms, establishing a sales and marketing organization or suitable third-party alternatives
for any approved product, generating sufficient sales revenue from our drug candidates, and raising sufficient funds to finance business
activities.
We
might not be able to continue as a going concern, which could cause our stockholders to lose most or all of their investment.
Our
audited financial statements for the year ended December 31, 2025 were prepared under the assumption that we would continue as a going
concern. However, we have concluded that there is substantial doubt about our ability to continue as a going concern, therefore our independent
registered public accounting firm included a “going concern” explanatory paragraph in its report on our financial statements
for the year ended December 31, 2025, indicating that, without additional sources of funding, our cash at December 31, 2025 is not sufficient
for us to operate as a going concern for a period of at least one year from the date that the financial statements included in this Annual
Report on Form 10-K are issued. Management’s plans concerning these matters, including our need to raise additional capital, are
described in Note 2 of our financial statements included within this Annual Report on Form 10-K, however, management cannot assure you
that its plans will be successful. If we cannot continue as a viable entity, our stockholders would likely lose most or all of their
investment in us.
We
will need to raise additional capital to fund our planned future operations, and we may be unable to secure such capital without significant
dilutive financing transactions. If we are not able to raise additional capital, we may not be able to complete the development, testing,
and commercialization of our drug candidates.
We
have not generated significant revenue and have incurred significant net losses in each year since our inception. For the year ended
December 31, 2025, we incurred a net loss of $14.5 million. We have incurred approximately $421 million of cumulative net losses. As
of December 31, 2025, we had cash and cash equivalents of $8.8 million.
We
have substantial future capital requirements to continue our research and development activities and advance our drug candidates through
various development stages, including the Phase 3 registrational trial of IMNN-001 in advanced ovarian cancer. We are unable to estimate
the duration and completion costs of our research and development projects or when, if ever, and to what extent we will receive cash
inflows from the commercialization and sale of a product. Our inability to complete any of our research and development activities, preclinical
studies or clinical trials in a timely manner or our failure to enter into collaborative agreements when appropriate could significantly
increase our capital requirements and could adversely impact our liquidity. While our estimated future capital requirements are uncertain
and could increase or decrease as a result of many factors, including the extent to which we choose to advance our research, development
activities, preclinical studies and clinical trials, or if we are in a position to pursue manufacturing or commercialization activities,
we will need significant additional capital to develop our drug candidates through development and clinical trials, obtain regulatory
approvals and manufacture and commercialize approved products, if any. We do not know whether we will be able to access additional capital
when needed or on terms favorable to us or our stockholders. Our inability to raise additional capital, or to do so on terms reasonably
acceptable to us, would jeopardize the future success of our business.
If
we do not obtain or maintain FDA and foreign regulatory approvals for our drug candidates on a timely basis, or at all, or if the terms
of any approval impose significant restrictions or limitations on use, we will be unable to sell those products and our business, results
of operations and financial condition will be negatively affected.
To
obtain regulatory approvals from the FDA and foreign regulatory agencies, we must conduct clinical trials demonstrating that our drug
candidates are safe and effective. We may need to amend ongoing trials, or the FDA and/or foreign regulatory agencies may require us
to perform additional trials beyond those we planned. The testing and approval process requires substantial time, effort and resources,
and generally takes a number of years to complete. The time to obtain approvals is also uncertain, and the FDA and foreign regulatory
agencies have substantial discretion, at any phase of development, to terminate clinical studies, require additional clinical studies
or other testing, delay or withhold approval, and mandate product withdrawals, including recalls. In addition, our drug candidates may
have undesirable side effects or other unexpected characteristics that could cause us or regulatory authorities to interrupt, delay or
halt clinical trials and could result in a more restricted label or the delay or denial of regulatory approval by regulatory authorities.
Even
if we receive regulatory approval of a product, the approval may limit the indicated uses for which the drug may be marketed. The failure
to obtain timely regulatory approval of drug candidates, the imposition of marketing limitations, or a product withdrawal would negatively
impact our business. Even if we receive approval, we will be subject to ongoing regulatory obligations and continued regulatory review,
which may result in significant additional expense and subject us to restrictions, withdrawal from the market, or penalties if we fail
to comply with applicable regulatory requirements or if we experience unanticipated problems with our drug candidates, when and if approved.
Finally, even if we obtain FDA approval of any of our drug candidates, we may never obtain approval or commercialize such products outside
of the U.S., given that we may be subject to additional regulatory burdens in other markets. This could limit our ability to realize
their full market potential.
Drug
development is an inherently uncertain process with a high risk of failure at every stage of development.
Securing
FDA or comparable foreign regulatory approval requires the submission of extensive preclinical and clinical data and supporting information
for each therapeutic indication to establish the drug candidate’s safety and efficacy for its intended use. It takes years to complete
the testing of a new drug or biological product and development delays and/or failure can occur at any stage of testing. Any of our present
and future clinical trials may be delayed, halted, not authorized, or approval of any of our products may be delayed or may not be obtained
due to any of the following:
In
addition, information generated during the clinical trial process is susceptible to varying interpretations that could delay, limit,
or prevent marketing approval. Moreover, early positive preclinical or clinical trial results may not be replicated in later clinical
trials. As more drug candidates within a particular class of drugs proceed through clinical development to regulatory review and approval,
the amount and type of clinical data that may be required by regulatory authorities may increase or change. Failure to demonstrate adequately
the quality, safety, and efficacy of any of our drug candidates would delay or prevent marketing approval. We cannot assure you that
if clinical trials are completed, either we or our potential collaborators will submit applications for required authorizations to manufacture
or market potential products or that any such application will be reviewed and approved by appropriate regulatory authorities in a timely
manner, if at all.
New
gene-based products for therapeutic applications are subject to extensive regulation by the FDA and comparable agencies in other countries.
The precise regulatory requirements with which we will have to comply, now and in the future, are uncertain due to the novelty of the
gene-based products we are developing.
The
regulatory approval process for novel drug candidates such as ours can be significantly more expensive and take longer than for other,
better-known or more extensively studied drug candidates. Limited data exist regarding the safety and efficacy of DNA-based therapeutics
compared with conventional therapeutics, and government regulation of DNA-based therapeutics is evolving. Regulatory requirements governing
gene and cell therapy products have changed frequently and may continue to change in the future. The FDA has established the Office of
Therapeutic Products within CBER, to consolidate the review of gene therapy and related products, and has established the Cellular, Tissue
and Gene Therapies Advisory Committee to advise CBER in its review. It is difficult to determine how long it will take or how much it
will cost to obtain regulatory approvals for our drug candidates in either the U.S. or the European Union or how long it will take to
commercialize our drug candidates.
Adverse
events or the perception of adverse events in the field of gene therapy generally, or with respect to our drug candidates specifically,
may have a particularly negative impact on public perception of gene therapy and result in greater governmental regulation, including
future bans or stricter standards imposed on gene-based therapy clinical trials, stricter labeling requirements and other regulatory
delays in the testing or approval of our potential products. For example, if we were to engage an NIH-funded institution to conduct a
clinical trial involving recombinant or nucleic acid molecules, we may be subject to review by an IBC and, in some cases, the NIH. Such
review can delay the initiation of a clinical trial, even if the FDA has reviewed the trial design and details and approved its initiation.
Conversely, the FDA can put an IND application on a clinical hold even if the IBC or the NIH has provided a favorable review. Such reviews
and any new guidelines may lengthen the regulatory review process, require us to perform additional studies, increase our development
costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of our drug candidates
or lead to significant post-approval limitations or restrictions. Any increased scrutiny could delay or increase the costs of our product
development efforts or clinical trials.
Even
if our products receive regulatory approval, they may still face future development and regulatory difficulties. Government regulators
may impose ongoing requirements for potentially costly post-approval studies. This governmental oversight may be particularly strict
with respect to gene-based therapies.
If
we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise
adversely affected.
We
have experienced and 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 and exclusion criteria defined in the protocol;
● the willingness or availability of patients to participate in our trials;
● the proximity of patients to trial sites;
● the design of the trial;
● our ability to obtain and maintain patient informed consents; and
Our
inability to enroll a sufficient number of patients for our clinical trials could result in significant delays or may require us to abandon
one or more clinical trials altogether. Enrollment delays in our clinical trials may result in increased development costs for our drug
candidates, delay or halt the development of and approval processes for our drug candidates and jeopardize our ability to achieve our
clinical development timeline and goals, including the dates by which we will commence, complete and receive results from clinical trials.
Enrollment delays may also delay or jeopardize our ability to commence sales and generate revenues from our drug candidates. Any of the
foregoing could cause the value of our company to decline and limit our ability to obtain additional financing, if needed.
We
rely on third parties to conduct all of our clinical trials. If these third parties are unable to carry out their contractual duties
in a manner that is consistent with our expectations, comply with budgets and other financial obligations or meet expected deadlines,
we may not receive certain development milestone payments or be able to obtain regulatory approval for or commercialize our drug candidates
in a timely or cost-effective manner.
We
do not independently conduct clinical trials for our drug candidates. We rely, and expect to continue to rely, on third-party clinical
investigators, CROs, clinical data management organizations and consultants to design, conduct, supervise and monitor our clinical trials.
Because
we do not conduct our own clinical trials, we must rely on the efforts of others and have reduced control over aspects of these activities,
including the timing of such trials, the costs associated with such trials and the procedures that are followed for such trials. We do
not expect to significantly increase our personnel in the foreseeable future and may continue to rely on third parties to conduct all
of our future clinical trials. If we cannot contract with acceptable third parties on commercially reasonable terms or at all, if these
third parties are unable to carry out their contractual duties or obligations in a manner that is consistent with our expectations or
meet expected deadlines, if they do not carry out the trials in accordance with budgeted amounts, if the quality or accuracy of the clinical
data they obtain is compromised due to their failure to adhere to our clinical protocols or for other reasons, or if they fail to maintain
compliance with applicable government regulations and standards, our clinical trials may be extended, delayed or terminated or may become
significantly more expensive, we may not receive development milestone payments when expected or at all, and we may not be able to obtain
regulatory approval for or successfully commercialize our drug candidates.
Despite
our reliance on third parties to conduct our clinical trials, we are ultimately responsible for ensuring that each of our clinical trials
is conducted in accordance with the general investigational plan and protocols for the trial. Moreover, the FDA requires clinical trials
to be conducted in accordance with good clinical practices for conducting, recording and reporting the results of clinical trials and
that the rights, integrity and confidentiality of clinical trial participants are protected. We also are required to register ongoing
clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within
certain timeframes. Failure to do so can result in fines, adverse publicity, and civil and criminal sanctions. Our reliance on third
parties that we do not control does not relieve us of these responsibilities and requirements. If we or a third party we rely on fails
to meet these requirements, we may not be able to obtain, or may be delayed in obtaining, marketing authorizations for our drug candidates
and will not be able to, or may be delayed in our efforts to, successfully commercialize our drug candidates. This could have a material
adverse effect on our business, financial condition, results of operations and prospects.
Because
we rely on third-party manufacturing and supply partners, our supply of research and development, preclinical and clinical development
materials may become limited or interrupted or may not be of satisfactory quantity or quality.
We
rely on third-party supply and manufacturing partners to supply the materials and components for, and manufacture, our research and development,
preclinical and clinical trial drug supplies. We do not own manufacturing facilities or supply sources for such components and materials.
There can be no assurance that our supply of research and development, preclinical and clinical development drugs and other materials
will not be limited, interrupted, or restricted in certain geographic regions or will be of satisfactory quality or will continue to
be available at acceptable prices. Suppliers and manufacturers must meet applicable manufacturing requirements and undergo rigorous facility
and process validation tests required by FDA and foreign regulatory authorities in order to comply with regulatory standards, such as
current cGMP.
If
we or any of our third-party manufacturers or testing contractors fail to maintain regulatory compliance, this could cause the delay
of clinical trials, regulatory submissions, required approvals or commercialization of our drug candidates, cause us to incur higher
costs and prevent us from commercializing our products successfully. Furthermore, if our suppliers fail to meet contractual requirements,
and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, our clinical
trials may be delayed, or we could lose potential revenue. In the event that any of our suppliers or manufacturers fails to comply with
such requirements or to perform its obligations to us in relation to quality, timing or otherwise, or if our supply of components or
other materials becomes limited or interrupted for other reasons, we may be forced to manufacture the materials ourselves, for which
we currently do not have the capabilities or resources, or enter into an agreement with another third party, which we may not be able
to do on reasonable terms, if at all.
The
regulatory authorities also may, at any time following approval of a product for sale, inspect the manufacturing facilities of our third-party
manufacturers. If any such inspection or audit identifies a failure to comply with applicable regulations or if a violation of our product
specifications or applicable regulations occurs independent of such an inspection or audit, we or the relevant regulatory authority may
require remedial measures that may be costly and/or time-consuming for us or our third-party manufacturers to implement and that may
include the temporary or permanent suspension of a clinical trial or commercial sales or the temporary or permanent closure of a manufacturing
facility. Any such remedial measures imposed upon third parties with whom we contract could materially harm our business.
If
we fail to enter into and maintain successful strategic alliances for our drug candidates, we may have to reduce or delay our drug candidate
development or increase our expenditures. To the extent we are able to enter into strategic transactions, we will be exposed to risks
related to those collaborations and alliances.
An
important element of our strategy for developing, manufacturing, and commercializing our drug candidates is entering into strategic alliances
with pharmaceutical companies, research institutions, or other industry participants to advance our programs and enable us to maintain
our financial and operational capacity.
We
face significant competition in seeking appropriate alliances. We may not be able to negotiate alliances on acceptable terms, if at all.
In addition, these alliances may be unsuccessful. If we fail to create and maintain suitable alliances, we may have to limit the size
or scope of, or delay, one or more of our drug development or research programs. If we elect to fund drug development or research programs
on our own, we will have to increase our expenditures and will need to obtain additional funding, which may be unavailable or available
only on unfavorable terms.
We
may not successfully engage in future strategic transactions, which could adversely affect our ability to develop and commercialize drug
candidates, impact our cash position, increase our expenses and present significant distractions to our management.
In
the future, we may consider strategic alternatives intended to further the development of our business, which may include acquiring businesses,
technologies, or products, out- or in-licensing drug candidates or technologies or entering into a business combination with another
company. Any strategic transaction may require us to incur non-recurring or other charges, increase our near- and long-term expenditures
and pose significant integration or implementation challenges or disrupt our management or business. These transactions would entail
numerous operational and financial risks, including exposure to unknown liabilities, disruption of our business and diversion of our
management’s time and attention in order to manage a collaboration or develop acquired products, drug candidates or technologies,
incurrence of substantial debt or dilutive issuances of equity securities to pay transaction consideration or costs, higher than expected
collaboration, acquisition or integration costs, write-downs of assets or goodwill or impairment charges, increased amortization expenses,
difficulty and cost in facilitating the collaboration or combining the operations and personnel of any acquired business, impairment
of relationships with key suppliers, manufacturers or customers of any acquired business due to changes in management and ownership and
the inability to retain key employees of any acquired business. Accordingly, although there can be no assurance that we will undertake
or successfully complete any transactions of the nature described above, any transactions that we do complete may be subject to the foregoing
or other risks and have a material adverse effect on our business, results of operations, financial condition and prospects. Conversely,
any failure to enter any strategic transaction that would be beneficial to us could delay the development and potential commercialization
of our drug candidates and have a negative impact on the competitiveness of any drug candidate that reaches market.
We
have obtained Orphan Drug Designation for IMNN-001 and may seek Orphan Drug Designation for other drug candidates, but we may be unsuccessful
or may be unable to maintain the benefits associated with Orphan Drug Designation, including the potential for market exclusivity.
IMNN-001
has been granted orphan drug designation for ovarian cancer in both the U.S. and Europe. Regulatory authorities in some jurisdictions,
including the U.S. and Europe, may designate drugs or biologics for relatively small patient populations as orphan drugs. Under the Orphan
Drug Act, the FDA may designate a drug or biologic as an orphan drug if the disease or condition for which the drug is intended affects
fewer than 200,000 individuals in the U.S., or, if the drug is intended for a disease or condition affecting 200,000 or more people in
the U.S., there is no reasonable expectation that the cost of developing and making available in the U.S. the drug or biologic for the
disease or condition will be recovered from sales of the drug in the U.S.
Even
though we have obtained Orphan Drug Designation for IMNN-001 and may obtain such designation for other drug candidates in specific indications,
we may not be the first to obtain marketing approval of these drug candidates for the orphan-designated indication due to the uncertainties
associated with developing pharmaceutical products. In addition, exclusive marketing rights in the U.S. may be limited if we seek approval
for an indication broader than the orphan-designated indication or may be lost if the FDA later determines that the request for designation
was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients
with the rare disease or condition. Further, even if we obtain orphan drug exclusivity for a product, that exclusivity may not effectively
protect the product from competition because different drugs with different active moieties can be approved for the same indication.
Even after an orphan product is approved, the FDA can subsequently approve a different sponsor’s application for the same drug
for the same indication if the FDA concludes that the later drug is safer, more effective or makes a major contribution to patient care.
Orphan Drug Designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in
the regulatory review or approval process.
Fast
Track designation may not actually lead to a faster development or regulatory review or approval process.
IMNN-001
received U.S. FDA Fast Track designation in 2021. However, we may not experience a faster development process, review, or approval compared
to a product that lacks Fast Track designation. The FDA may withdraw our Fast Track designation if the FDA believes that the designation
is no longer supported by data from our clinical or pivotal development program. Our Fast Track designation does not guarantee that we
will qualify for or be able to take advantage of the FDA’s expedited review procedures or that any application that we may submit
to the FDA for regulatory approval will be accepted for filing or ultimately approved.
Our
relationships with healthcare providers and physicians and third-party payors will be subject to applicable false claims act, anti-kickback,
transparency, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties,
contractual damages, administrative burdens, reputational harm and diminished profits and future earnings.
Healthcare
providers, physicians, and third-party payors in the U.S. and elsewhere play a primary role in the recommendation and prescription of
biopharmaceutical products. Arrangements with third-party payors and customers can expose biopharmaceutical manufacturers to broadly
applicable fraud and abuse and other healthcare laws and regulations, including, without limitation, the federal Anti-Kickback Statute
and the federal False Claims Act, which may constrain the business or financial arrangements and relationships through which such companies
sell, market and distribute biopharmaceutical products. In particular, the research of our drug candidates, as well as the promotion,
sales and marketing of healthcare items and services, as well as certain business arrangements in the healthcare industry, are subject
to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict
or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive
programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained
in the course of patient recruitment for clinical trials.
The
distribution of biopharmaceutical products is subject to additional requirements and regulations, including extensive record-keeping,
licensing, storage, and security requirements intended to prevent the unauthorized sale of biopharmaceutical products.
The
scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform,
especially in light of the lack of applicable precedent and regulations. Ensuring business arrangements comply with applicable healthcare
laws, as well as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert
a company’s attention from the business.
It
is possible that governmental and enforcement authorities will conclude that our business practices may not comply with current or future
statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations. 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, including the imposition of significant civil, criminal and administrative penalties, damages, fines, disgorgement,
imprisonment, reputational harm, possible exclusion from participation in federal and state funded healthcare programs, contractual damages
and the curtailment or restricting of our operations, as well as additional reporting obligations and oversight if we become subject
to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws. Further, if any of the
physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance with applicable
laws, they may be subject to significant criminal, civil or administrative sanctions, including exclusions from government funded healthcare
programs. Any action for violation of these laws, even if successfully defended, could cause a biopharmaceutical manufacturer to incur
significant legal expenses and divert management’s attention from the operation of the business. Prohibitions or restrictions on
sales or withdrawal of future marketed products could materially affect business in an adverse way.
Ongoing
legislative and regulatory changes affecting the healthcare industry could have a material adverse effect on our business.
Political,
economic and regulatory influences are subjecting the healthcare industry to potential fundamental changes that could substantially affect
our results of operations by requiring, for example: (i) changes to our manufacturing arrangements; (ii) additions or modifications to
product labeling; (iii) the recall or discontinuation of our products, if approved; or (iv) additional record-keeping requirements.
We
cannot predict what healthcare reform initiatives may be adopted in the future. Further, federal and state legislative and regulatory
developments are likely, and we expect ongoing initiatives in the U.S. to increase pressure on drug pricing. Such reforms could have
an adverse effect on anticipated revenues for any drug candidates that we may successfully develop and for which we may obtain regulatory
approval and may affect our overall financial condition and ability to develop drug candidates.
We
may fail to comply with evolving European and other privacy and data protection laws, which could materially adversely affect our business.
We
are subject to varying degrees of privacy regulation in the countries in which we operate, and the general trend is toward increasingly
stringent regulation and enforcement. We are, for example, subject to costly and complex U.S. and foreign laws governing the collection,
use, storage, disclosure, and cross-border transfer of personal information, about patients and other individuals and compliance with
such requirements can be costly and operationally burdensome that may materially adversely affect our financial condition and business
operations. Because we have conducted and may conduct clinical trials in the European Economic Area (“EEA”), we are subject
to additional data protection and clinical trial laws in the European Union. The General Data Protection Regulation, (EU) 2016/679 (“GDPR”),
for example, governs the processing of personal data, and imposes numerous requirements on companies that process personal data, including
requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates,
providing notices to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality
of personal data, alerting data subjects and authorities about data breaches, and taking specific measures when engaging third-party
processors. The GDPR also imposes strict rules on the transfer of personal data to countries outside the EEA, including the U.S., and
confers on data subjects the right to lodge complaints with supervisory authorities, and seek certain judicial review for violations
of the GDPR. In addition, the GDPR includes restrictions on cross-border data transfers. Under the GDPR, competent regulatory authorities
have the power to impose fines up to EUR 20 million or 4% of the global annual turnover (whichever is higher), depending on the nature
of the violation (see Art. 83, GDPR). In addition to fines, we may be subject to investigations, corrective orders, suspension of data
processing activities, private claims for damages, and reputational harm, any of which could materially adversely affect our business,
financial condition, and results of operations. Further consequences of non-compliance could be cease and desist claims by certain organizations/competitors,
damage claims, and reputational damage. We are also subject to Regulation (EU) No. 536/2014 of the European Parliament and of the Council
of 16 April 2014 on clinical trials on medicinal products for human use, which and repealing Directive 2001/20/EC governs how we conduct
clinical trials in the European Union together with Good Clinical Practices. As a result of Brexit, moreover, we also have independent
obligations, similar to those already imposed on us by GDPR, under the United Kingdom’s Data Protection Act, 2018. Additionally,
there are other local data protection laws, industry-specific requirements, regulations, or applicable codes of conduct which may impact
our operations. Although we have taken steps to implemented privacy compliance programs and controls but our business remains subject
to potential risks of controls imposed on cross border data flows, unauthorized access, and loss of personal data through internal and
external threats that could adversely impact our business operations and research activities.
The
success of our products, if approved, may be harmed if the government, private health insurers and other third-party payers do not provide
sufficient coverage or reimbursement.
Our
ability to commercialize our new cancer treatment systems successfully will depend in part on the extent to which reimbursement for the
costs of such products, if approved, and related treatments will be available from third-party payors, which include government authorities
such as Medicare, Medicaid, TRICARE, and the Veterans Administration, managed care providers, private health insurers, and other organizations.
Patients who are provided medical treatment for their conditions generally rely on third-party payors to reimburse all or part of the
costs associated with their treatment. Patients are unlikely to use our drug candidates unless coverage is provided, and reimbursement
is adequate to cover a significant portion of the cost. We cannot be sure that coverage and reimbursement will be available for, or accurately
estimate the potential revenue from, our drug candidates.
Our
products, if approved, may not achieve sufficient acceptance by the medical community to sustain our business.
The
commercial success of our products, if approved, will depend upon their acceptance by the medical community and third-party payors as
clinically useful, cost effective and safe. Any of our drug candidates or similar drug candidates being investigated by our competitors
may prove not to be effective in trial or in practice, cause adverse events or other undesirable side effects. Our testing and clinical
practice may not confirm the safety and efficacy of our drug candidates or even if further testing and clinical practice produce positive
results, the medical community may view these new forms of treatment as effective and desirable or our efforts to market our new products,
if approved, may fail. Market acceptance depends upon physicians and hospitals obtaining adequate reimbursement rates from third-party
payors to make our products, if approved, commercially viable. Any of these factors could have an adverse effect on our business, financial
condition, and results of operations.
We
have no internal sales or marketing capability. If we are unable to create sales, marketing and distribution capabilities or enter into
alliances with others possessing such capabilities to perform these functions, we will not be able to commercialize our products, if
approved, successfully.
We
currently have no sales, marketing, or distribution capabilities. We intend to market our products, if and when such products are approved
for commercialization by the FDA and foreign regulatory agencies, either directly or through other strategic alliances and distribution
arrangements with third parties. If we decide to market our products directly, we will need to commit significant financial and managerial
resources to develop a marketing and sales force with technical expertise and with supporting distribution, administration, and compliance
capabilities, including providing adequate training on such topics. If we rely on third parties with such capabilities to market our
products, we will need to establish and maintain partnership arrangements, and there can be no assurance that we will be able to enter
into third-party marketing or distribution arrangements on acceptable terms or at all. To the extent that we do enter into such arrangements,
we will be dependent on our marketing and distribution partners. In entering into third-party marketing or distribution arrangements,
we expect to incur significant additional expenses and there can be no assurance that such third parties will establish adequate sales
and distribution capabilities or be successful in gaining market acceptance for our products and services.
Our
success will depend in part on our ability to grow and diversify, which in turn will require that we manage and control our growth effectively.
Our
business strategy contemplates growth and diversification. Our ability to manage growth effectively will require that we continue to
expend funds to improve our operational, financial and management controls, reporting systems and procedures. In addition, we must effectively
expand, train, and manage our employees. We will be unable to manage our business effectively if we are unable to alleviate the strain
on resources caused by growth in a timely and successful manner. There can be no assurance that we will be able to manage our growth
and a failure to do so could have a material adverse effect on our business.
We
face intense competition and the failure to compete effectively could adversely affect our ability to develop and market our products,
if approved.
There
are many companies and other institutions engaged in research and development of various technologies for cancer treatment products that
seek treatment outcomes similar to those that we are pursuing. We believe that the level of interest by others in investigating the potential
of possible competitive treatments and alternative technologies will continue and may increase. Potential competitors engaged in all
areas of cancer treatment research in the U.S. and other countries include, among others, major pharmaceutical, specialized technology
companies, and universities and other research institutions. Most of our current and potential competitors have substantially greater
financial, technical, human and other resources, and may also have far greater experience than we do, both in pre-clinical testing and
human clinical trials of new products and in obtaining FDA and other regulatory approvals. One or more of these companies or institutions
could succeed in developing products or other technologies that are more effective than the products and technologies that we have been
or are developing, or which would render our technology and products obsolete and non-competitive. Furthermore, if we are permitted to
commence commercial sales of any of our products, we will also be competing, with respect to manufacturing efficiency and marketing,
with companies having substantially greater resources and experience in these areas.
We
may be subject to significant product liability claims and litigation.
Our
business exposes us to potential product liability risks inherent in the testing, manufacturing and marketing of human therapeutic products.
We presently have product liability insurance limited to $10 million per incident and $10 million annually. If we were to be subject
to a claim in excess of this coverage or to a claim not covered by our insurance and the claim succeeded, we would be required to pay
the claim with our own limited resources, which could have a severe adverse effect on our business. Whether or not we are ultimately
successful in any product liability litigation, such litigation would harm the business by diverting the attention and resources of our
management, consuming substantial amounts of our financial resources and by damaging our reputation. Additionally, we may not be able
to maintain our product liability insurance at an acceptable cost, if at all.
Our
internal computer systems, or those of our CROs or other contractors or consultants, may fail or suffer security breaches, which could
result in a material disruption of our product development programs.
Our
internal computer systems and those of our CROs and other contractors and consultants are vulnerable to damage from computer viruses
and malicious software that could attack our networks and data centers or those of our service providers; unauthorized parties may attempt
to gain access to our systems, networks, or facilities, or those of third parties with whom we do business, through fraud, trickery,
or other forms of deceiving our employees or contractors, direct social engineering, phishing, credential stuffing, ransomware, denial
or degradation of service attacks and similar types of attacks against any or all of us, our patients and our services providers; inadvertent
security breaches or theft, misuse, unauthorized access or other improper actions by our employees, patients, service providers and other
business partners; natural disasters, terrorism, war and telecommunication and electrical failures. These extensive information security
and cybersecurity threats, which affect companies globally, pose a risk to the security and availability of our systems and networks,
and the confidentiality, integrity, and availability of our sensitive data. Such events could cause significant interruptions of our
operations. For instance, the loss of preclinical data or data from any clinical trial involving our drug candidates could result in
delays in our development and regulatory filing efforts and significantly increase our costs. To the extent that any disruption or privacy
or security breach were to result in a loss of, or damage to, our data, or inappropriate disclosure of confidential or proprietary information,
we could be subject to reputational harm, monetary fines, civil suits, civil penalties or criminal sanctions and requirements to disclose
the breach, and other forms of liability and the development of our drug candidates could be delayed. In addition, such interruptions
and cyber security incidents and faults can cause reputational damage.
Our
employees, independent contractors, consultants, collaborators and contract research organizations may engage in misconduct or other
improper activities, including non-compliance with regulatory standards and requirements, which could cause significant liability for
us and harm our reputation.
We
are exposed to the risk that our employees, independent contractors, consultants, collaborators, and contract research organizations
may engage in fraudulent conduct or other illegal activity. Misconduct by those parties could include intentional, reckless and/or negligent
conduct or disclosure of unauthorized activities to us that violates: (1) FDA regulations or similar regulations of comparable non-U.S.
regulatory authorities, including those laws requiring the reporting of true, complete and accurate information to such authorities,
(2) manufacturing standards, (3) federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established
and enforced by comparable non-U.S. regulatory authorities, and (4) laws that require the reporting of financial information or data
accurately. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations
intended to prevent fraud, misconduct, kickbacks, self- dealing, bribery, and other abusive practices. These laws and regulations restrict
or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs, and other business
arrangements. Employee or collaborator misconduct could also involve the improper use of, including trading on, information obtained
in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. While we have a code
of conduct and business ethics, it is not always possible to identify and deter misconduct, 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, standards or regulations. If
any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could
have a significant impact on our business and results of operations, including the imposition of civil, criminal and administrative penalties,
damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, additional
reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations
of non-compliance with these laws, imprisonment, contractual damages, reputational harm, diminished profits and future earnings, and
curtailment of our operations, any of which could have a material adverse effect on our ability to operate our business and our results
of operations.
Litigation
and other legal proceedings against the Company, which may arise in the ordinary course of Company’s business, could be costly
and time consuming to defend.
The
Company is from time to time subject to legal proceedings and claims that arise in the ordinary course of business. From time to time,
third parties may in the future assert intellectual property rights to technologies that are important to the Company’s business
and may in the future demand that we license their technology. Litigation may result in substantial costs and may divert management’s
attention and resources, which may seriously harm the Company’s business, overall financial condition, and operating results.
RISKS
RELATED TO OUR INTELLECTUAL PROPERTY
Our
business depends on license agreements with third parties to permit us to use patented technologies. The loss of any of our rights under
these agreements could impair our ability to develop and market our products, if approved.
Our
success will depend, in a substantial part, on our ability to maintain our rights under license agreements granting us rights to use
patented technologies. If we breach any provisions of the license agreements, we may lose our ability to use the subject technology,
as well as compensation for our efforts in developing or exploiting the technology. Any such loss of rights and access to technology
could have a material adverse effect on our business.
Further,
we cannot guarantee that any patent or other technology rights licensed to us by others will not be challenged or circumvented successfully
by third parties, or that the rights granted will provide adequate protection. We may be required to alter any of our potential products
or processes or enter into a license and pay licensing fees to a third party or cease certain activities. There can be no assurance that
we can obtain a license to any technology that we determine we need on reasonable terms, if at all, or that we could develop or otherwise
obtain alternate technology. If a license is not available on commercially reasonable terms or at all, our business, results of operations,
and financial condition could be significantly harmed, and we may be prevented from developing and commercializing the product. Litigation,
which could result in substantial costs, may also be necessary to enforce any patents issued to or licensed by us or to determine the
scope and validity of another’s claimed proprietary rights.
If
any of our pending patent applications are not issued, or are deemed invalid following issuance, or if our issued patents expire without
obtaining issuance of our later-filed patent applications, we may lose valuable intellectual property protection.
The
patent positions of pharmaceutical and biotechnology companies, such as ours, are uncertain and involve complex legal and factual issues.
We own various U.S. and international patents and have pending U.S. and international patent applications that cover various aspects
of our technologies. There can be no assurance that patents that have been issued will be held valid and enforceable in a court of law
through the entire patent term. Even for patents that are held valid and enforceable, the legal process associated with obtaining such
a judgment is time-consuming and costly. Additionally, issued patents can be subject to opposition, interferences or other proceedings
that can result in the revocation of the patent or maintenance of the patent in amended form (and potentially in a form that renders
the patent without commercially relevant or broad coverage). Further, our competitors may be able to circumvent and otherwise design
around our patents. Even if a patent is issued and enforceable because development and commercialization of pharmaceutical products can
be subject to substantial delays, patents may expire early and provide only a short period of protection, if any, following the commercialization
of products, if approved, encompassed by our patents. We may have to participate in interference proceedings declared by the U.S. Patent
and Trademark Office, which could result in a loss of the patent and/or substantial cost to us.
We
have filed patent applications, and plan to file additional patent applications, covering various aspects of our technologies and our
proprietary drug candidates. There can be no assurance that the patent applications for which we apply would actually be issued as patents
or do so with commercially relevant or broad coverage. The coverage claimed in a patent application can be significantly reduced before
the patent is issued. The scope of our claim coverage can be critical to our ability to enter into licensing transactions with third
parties and our right to receive royalties from our collaboration partnerships. Since publication of discoveries in scientific or patent
literature often lags behind the date of such discoveries, we cannot be certain that we were the first inventor of inventions covered
by our patents or patent applications. In addition, there is no guarantee that we will be the first to file a patent application directed
to an invention.
Certain
of our issued patents pertaining to the TheraPlas and IMNN-001 technologies have expired or will expire on dates ranging from 2025 to
2028. If we are unable to obtain issuance of our later-filed, later-expiring patent applications or other means of regulatory exclusivity
for our products, the expiration of patents might create opportunities for competitors to enter the market for our target indications,
which could have a material negative impact on our financial results. Without patent protection, we are susceptible to competitors bringing
similar products to market, obtaining FDA approval, and achieving regulatory exclusivity prior to us.
An
adverse outcome in any judicial proceeding involving intellectual property, including patents, could subject us to significant liabilities
to third parties, require disputed rights to be licensed from or to third parties or require us to cease using the technology in dispute.
In those instances where we seek an intellectual property license from another, we may not be able to obtain the license on a commercially
reasonable basis, if at all, thereby raising concerns on our ability to freely commercialize our technologies or products.
We
rely on trade secret protection and other unpatented proprietary rights for important proprietary technologies, and any loss of such
rights could harm our business, results of operations and financial condition.
We
rely on trade secrets and confidential information that we seek to protect, in part, by confidentiality agreements with our corporate
partners, collaborators, employees and consultants. We cannot assure you that these agreements are adequate to protect our trade secrets
and confidential information or will not be breached or, if breached, we will have adequate remedies. Furthermore, others may independently
develop substantially equivalent confidential and proprietary information or otherwise gain access to our trade secrets or disclose such
technology. Any loss of trade secret protection or other unpatented proprietary rights could harm our business, results of operations
and financial condition.
We
may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights.
Our
commercial success depends on our ability to operate without infringing the patents and other proprietary rights of third parties. Although
we currently are not involved in any material litigation involving patents, a third-party patent holder may assert a claim of patent
infringement against us in the future. Alternatively, we may initiate litigation against the third-party patent holder to request that
a court declare that we are not infringing the third party’s patent and/or that the third party’s patent is invalid or unenforceable.
Any infringement action asserted against us, even if we are ultimately successful in defending against such action, would likely delay
the regulatory approval process of our products, harm our competitive position, be expensive and require the time and attention of our
key management and technical personnel. 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.
RISKS
RELATED TO OUR SECURITIES
The
market price of our common stock has been, and may continue to be volatile and fluctuate significantly, which could result in substantial
losses for investors and subject us to securities class action litigation.
The
trading price for our common stock has been, and we expect it to continue to be, volatile. The price at which our common stock trades
depends upon a number of factors, some of these factors are beyond our control. Broad market fluctuations may lower the market price
of our common stock and affect the volume of trading in our stock, regardless of our financial condition, results of operations, business
or prospects. In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Annual Report, these
factors include:
● regulatory developments in both the United States and abroad;
● public announcements by our competitors or others; and
● general market conditions and comments by securities analysts and investors.
We
may be unable to maintain compliance with The Nasdaq Marketplace Rules, which could cause our common stock to be delisted from the Nasdaq
Capital Market. This could result in the lack of a market for our common stock, cause a decrease in the value of an investment in us,
and adversely affect our business, financial condition, and results of operations.
We
have in the past been unable to meet the requirement of the Nasdaq Stock Market LLC (“Nasdaq”) to maintain a minimum closing
bid price of $1.00 per share, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). While
our common stock price is currently in compliance with the Minimum Bid Price Requirement, it is possible that in the future it will again
be out of compliance, which could cause us to be subject to a delisting determination.
We
received a deficiency letter on May 19, 2025 from Nasdaq notifying us that we were no longer in compliance with the minimum stockholders’
equity requirement (the “Minimum Stockholders’ Equity Requirement”) for continued listing on the Nasdaq Capital Market
pursuant to Nasdaq Listing Rule 5550(b)(1). Pursuant to Nasdaq Listing Rule 5810(d)(2), the failure to comply with the Minimum Stockholders’
Equity Requirement was a separate basis for delisting.
We
have not yet formally been advised by Nasdaq that we have regained compliance with the Minimum Stockholders’ Equity Requirement,
although our stockholders’ equity has been above the necessary threshold for the past two fiscal quarters.
Future
sales of our common stock in the public market could cause our stock price to fall.
Sales
of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress
the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities.
As of March 30, 2026, we had 3,922,764 shares of common stock outstanding, all of which, other than shares held by our directors and
certain officers, were eligible for sale in the public market, subject in some cases to compliance with the requirements of Rule 144,
including the volume limitations and manner of sale requirements. In addition, all of the shares of common stock issuable upon exercise
of warrants will be freely tradable without restriction or further registration upon issuance.
Our