ITEM 1A. RISK FACTORS
As a smaller reporting
company, we are not required to provide a statement of risk factors. Nonetheless, we are voluntarily providing risk factors herein. You
should consider carefully the following risk factors, together with all the other information in this Annual Report on Form 10-K, including
our consolidated financial statements and notes thereto, and in our other public filings with the SEC. The risk factors discussed below
cover not only our current products, product candidates and relationships, but also the risks we expect to encounter when and if we add
new product candidates and approved products to our proprietary portfolio, which new products, if added, we expect to be at various stages
of pre-clinical and perhaps clinical development. The occurrence of any of the following risks could harm our business, financial
condition, results of operations and/or growth prospects or cause our actual results to differ materially from those contained in forward-looking
statements we have made in this report and those we may make from time to time. You should consider all of the risk factors described
when evaluating our business.
We operate in a highly
competitive and highly regulated business environment. Our business can be expected to be affected by government regulation, economic,
political and social conditions, business’ response to new and existing products and services, technological developments and the
ability to obtain and maintain patent and/or other intellectual property protection for our products and intellectual property. Our actual
results could differ materially from management’s expectations because of changes both within and outside of our control. Reviewers
of this Annual Report on Form 10-K are cautioned not to place undue reliance upon such forward-looking statements. Such forward-looking
statements may include projections with respect to market size and acceptance, revenues and earnings, marketing and sales strategies and
business operations, as well as efficacy of our products. The risk factors discussed below cover not only our current products, product
candidates and relationships, but also the risks we expect to encounter when and if we add new product candidates and approved products
to our proprietary portfolio, which new products, if added, we expect to be at various stages of pre-clinical and perhaps clinical development.
Throughout this section,
references to “Company,” “Coeptis,” “we,” “us,” “our” and similar terms refer
collectively to Coeptis Therapeutics Holdings, Inc., a Delaware corporation, and its operating subsidiaries, as the context so requires.
Risks Related to the Development and Regulatory
Approval of Our Product Candidates
Clinical trials are expensive, time consuming,
difficult to design and implement, and involve uncertain outcomes. Results of previous pre-clinical studies and clinical trials may not
be predictive of future results, and the results of our current and planned clinical trials may not satisfy the requirements of the FDA
or other regulatory authorities.
Positive or timely results
from pre-clinical or early-stage trials do not ensure positive or timely results in late-stage clinical trials or product approval by
the FDA or comparable foreign regulatory authorities. We will be required to demonstrate with substantial evidence through well-controlled
clinical trials that our product candidates are safe and effective for use in a diverse population before we can seek regulatory approvals
for their commercialization. Our planned clinical trials may produce negative or inconclusive results, and we or any of our current and
future strategic partners may decide, or regulators may require us, to conduct additional clinical or pre-clinical testing.
Success in pre-clinical studies
or early-stage clinical trials does not mean that future clinical trials or registration clinical trials will be successful because product
candidates in later-stage clinical trials may fail to demonstrate sufficient safety and efficacy to the satisfaction of the FDA and foreign
regulatory authorities, despite having progressed through pre-clinical studies and initial clinical trials. Product candidates that have
shown promising results in early clinical trials may still suffer significant setbacks in subsequent clinical trials or registration clinical
trials. For example, a number of companies in the biopharmaceutical industry, including those with greater resources and experience than
us, have suffered significant setbacks in advanced clinical trials, even after obtaining promising results in earlier clinical trials.
Similarly, pre-clinical interim results of a clinical trial are not necessarily predictive of final results.
If clinical trials for our product candidates
are prolonged, delayed or stopped, we may be unable to obtain regulatory approval and commercialize our product candidates on a timely
basis, or at all, which would require us to incur additional costs and delay our receipt of any product revenue.
We may experience delays in
our ongoing or future pre-clinical studies or clinical trials, and we do not know whether future pre-clinical studies or clinical trials
will begin on time, need to be redesigned, enroll an adequate number of patients or be completed on schedule, if at all. The commencement
or completion of these planned clinical trials could be substantially delayed or prevented by many factors, including, but not limited
to:
· inability to obtain sufficient funds required for a clinical trial;
· slower than expected rates of patient recruitment and enrollment;
· failure of patients to complete the clinical trial;
· lack of efficacy during clinical trials;
· termination of our clinical trials by one or more clinical trial sites;
· inability to monitor patients adequately during or after treatment;
Changes in regulatory requirements,
policies and guidelines may also occur and we may need to significantly amend clinical trial protocols to reflect these changes with appropriate
regulatory authorities. These changes may require us to renegotiate terms with CROs or resubmit clinical trial protocols to IRBs for re-examination,
which may impact the costs, timing or successful completion of a clinical trial. Our clinical trials may be suspended or terminated at
any time by the FDA, other regulatory authorities, the IRB overseeing the clinical trial at issue, any of our clinical trial sites with
respect to that site, or us. Any failure or significant delay in commencing or completing clinical trials for our product candidates may
adversely affect our ability to obtain regulatory approval and our commercial prospects and our ability to generate product revenue will
be diminished.
The design or our execution of clinical
trials may not support regulatory approval.
The design or execution of
a clinical trial can determine whether its results will support regulatory approval and flaws in the design or execution of a clinical
trial may not become apparent until the clinical trial is well advanced. In some instances, there can be significant variability in safety
or efficacy results between different trials of the same product candidate due to numerous factors, including changes in trial protocols,
differences in size and type 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 may conduct will demonstrate consistent or adequate efficacy
and safety to obtain regulatory approval to market our product candidates.
Further, the FDA and comparable
foreign regulatory authorities have substantial discretion in the approval process and in determining when or whether regulatory approval
will be obtained for any of our product candidates. Our product candidates may not be approved even if they achieve their primary endpoints
in future clinical trials. The FDA or foreign regulatory authorities may disagree with our trial design and our interpretation of data
from pre-clinical studies and clinical trials. In addition, any of these regulatory authorities may change requirements for the approval
of a product candidate even after reviewing and providing comments or advice on a protocol for clinical trial that has the potential to
result in FDA or other agencies’ approval. In addition, such regulatory authorities may also approve a product candidate for fewer
or more limited indications than we request or may grant approval contingent on the performance of costly post-marketing clinical trials.
The FDA or foreign regulatory authorities may not approve the labeling claims that we believe would be necessary or desirable for the
successful commercialization of our product candidates which may have a material adverse effect on our business.
We may find it difficult to enroll patients
in our clinical trials given the limited number of patients who have the diseases for which our product candidates are being studied which
could delay or prevent the start of clinical trials for our product candidates.
Identifying and qualifying
patients to participate in clinical trials of our product candidate is essential to our success. The timing of our clinical trials depends
in part on the rate at which we can recruit patients to participate in clinical trials of our product candidates, and we may experience
delays in our clinical trials if we encounter difficulties in enrollment. If we experience delays in our clinical trials, the timeline
for obtaining regulatory approval of our product candidates will most likely be delayed.
Many factors may affect our
ability to identify, enroll and maintain qualified patients, including the following:
· design of the clinical trial;
· size and nature of the patient population;
· the availability and efficacy of competing therapies and clinical trials;
· pendency of other trials underway in the same patient population;
· willingness of physicians to participate in our planned clinical trials;
· severity of the disease under investigation;
· proximity of patients to clinical sites;
· patients who do not complete the trials for personal reasons; and
· issues with CROs and/or with other vendors that handle our clinical trials.
General Risks
There is a substantial doubt about our ability
to continue as a going concern.
The report of our independent
registered public accounting firm that accompanies our consolidated financial statements includes an explanatory paragraph indicating
there is a substantial doubt about our ability to continue as a going concern, citing our need for additional capital for the future planned
expansion of our activities and to service our ordinary course activities (which may include servicing of indebtedness). The inclusion
of a going concern explanatory paragraph in the report of our independent registered public accounting firm will make it more difficult
for us to secure additional financing or enter into strategic relationships on terms acceptable to us, if at all, and likely will materially
and adversely affect the terms of any financing that we might obtain. Our consolidated financial statements do not include any adjustments
that may result from the outcome of this uncertainty.
We have incurred significant losses in prior
periods, and losses in the future could cause the quoted price of our Common Stock to decline or have a material adverse effect on our
financial condition, our ability to pay its debts as they become due, and on its cash flows.
For the year ended December
31, 2025, we incurred a net loss of $12,277,192 and, as of that date, we had an accumulated deficit of $109,953,728. For the year ended
December 31, 2024, we incurred a net loss of $10,877,412 and, as of that date, had an accumulated deficit of $98,036,713. Any losses in
the future could cause the quoted price of our Common Stock to decline or have a material adverse effect on our financial condition, its
ability to pay its debts as they become due, and on its cash flows.
To date, we have generated
only minimal product revenue. We expect that our planned product development and strategic expansion pursuits will increase losses significantly
over the next five years. In order to achieve profitability, we will be required to generate significant revenue. We cannot be certain
that we will generate sufficient revenue to achieve profitability. We anticipate that we will continue to generate operating losses and
experience negative cash flow from operations at least through the end of 2025. We cannot be certain that we will ever achieve profitability
or that, if profitability is achieved, that it will be maintained. If our revenue grows at a slower rate than we anticipate or if our
product development, marketing and operating expenses exceed our expectations or cannot be adjusted accordingly, our business, results
of operation and financial condition will be materially adversely affected, and we may be unable to continue operations.
We will not be able to generate
meaningful product revenue unless and until one of our product candidates or co-development products successfully completes clinical trials
and receives regulatory approval. As some of our current and projected future product candidates or co-development products are, and we
expect will be, at an early proof-of-concept stage, we do not expect to receive revenue from any of these products for several years,
if at all. We intend to seek to obtain revenue from collaboration or licensing agreements with third parties. We expect that we will need
to rely on key third-party agreements, in order to be in a position to realize material revenues in the future, and we may never enter
into any such agreements or realize material, ongoing future revenue. Even if we eventually generate revenues, we may never be profitable,
and, if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.
If we are unable to manage future expansion
effectively, our business may be adversely impacted.
In the future, we may experience
rapid growth in our business, which could place a significant strain on our operations, in general, and our internal controls and other
managerial, operating and financial resources, in particular. If we are unable to manage future expansion effectively, our business would
be harmed. There is, of course, no assurance that we will enjoy rapid development in our business.
The Company’s ability to be successful
will depend upon the efforts of the Company’s Board and our key personnel and the loss of such persons could negatively impact the
operations and profitability of the Company’s business.
The Company’s ability
to be successful is dependent upon the efforts of the Company’s board members and key personnel, in particular our President and
Chief Executive Officer David Mehalick. We cannot assure you that the Company’s board members and key personnel will be effective
or successful or remain with the Company. In addition to the other challenges they will face, such individuals may be unfamiliar with
the requirements of operating a public company, which could cause the Company’s management to expend time and resources becoming
familiar with such requirements. We have employment agreements in place with Mr. Mehalick and Daniel Yerace, but no other persons. The
loss of service of Mr. Mehalick, in particular, for any reason, could seriously impair our ability to effectuate our business plan, which
could have a materially adverse effect on our business and future results of operations. We also have not purchased any key-man life insurance.
If we are unable to recruit and retain key
personnel, our business may be harmed.
If we are unable to attract
and retain key personnel, our business may be harmed. Our failure to enable the effective transfer of knowledge and facilitate smooth
transitions with regard to our key employees could adversely affect our long-term strategic planning and execution.
Our business plan is not based on independent
market studies.
We have not commissioned any
independent market studies concerning our business plans. Rather, our plans for implementing our business strategy and achieving profitability
are based on the experience, judgment and assumptions of our management. If these assumptions prove to be incorrect, we may not be successful
in our business operations.
Our Board of Directors may change our policies
without shareholder approval.
Our policies, including any
policies with respect to investments, leverage, financing, growth, debt and capitalization, will be determined by our Board of Directors
or officers to whom our Board of Directors delegate such authority. Our Board of Directors will also establish the amount of any dividends
or other distributions that we may pay to our shareholders. Our Board of Directors or officers to which such decisions are delegated will
have the ability to amend or revise these and our other policies at any time without shareholder vote. Accordingly, our shareholders will
not be entitled to approve changes in our policies, which policy changes may have a material adverse effect on our financial condition
and results of operations.
We need to obtain financing in order to
continue our operations and pursue strategic transactions.
On a prospective basis, we
will require both short-term financing for operations and long-term capital to fund our expected growth. We currently have no existing
bank lines of credit and have not established any definitive sources for additional financing. We believe that cash on hand will be sufficient
to meet our short-term financial requirements through at least the 2nd quarter of 2026 assuming that we elect not to pursue
and consummate strategic transactions prior to that time. However, we will require additional funds if we want to fully implement our
business plan and growth strategy, including strategic transactions, which funds could come in the form of equity, debt (including secured
debt) or a combination of the two. Additional financing may not be available to us, or if available, then it may not be available upon
terms and conditions acceptable to us. If adequate funds are not available, then we may be required to delay, reduce or eliminate product
development or clinical programs. Our inability to take advantage of opportunities in the industry because of capital constraints may
have a material adverse effect on our business and our prospects. If we fail to obtain the capital necessary to fund our operations, we
will be unable to advance our development programs and complete our clinical trials.
In addition, our research
and development expenses could exceed our current expectations. This could occur for many reasons, including:
While we expect to seek additional
funding through public or private financings, we may not be able to obtain financing on acceptable terms, or at all. In addition, the
terms of our financings may be dilutive to, or otherwise adversely affect, holders of our common stock and other capital securities. We
may also seek additional funds through arrangements with collaborators or other third parties. These arrangements would generally require
us to relinquish rights to some of our technologies, product candidates or products, and we may not be able to enter into such agreements,
on acceptable terms, if at all. If we are unable to obtain additional funding on a timely basis, we may be required to curtail or terminate
some or all of our development programs, including some or all of our product candidates.
We currently do not have sufficient cash
to fully implement our business plan.
We have experienced a lack
of adequate capital resources causing us to be unable to fully implement our full business plan. We believe that we need to raise or otherwise
obtain additional financing beyond our current cash position in order to satisfy our existing obligations or fully implement our business
plan. We do not expect to have positive cash flow for the foreseeable future. If we are not successful in obtaining additional financing
we will not be able to fully implement our business plan and we may not be able to continue our operations.
We have a limited operating history and
a history of operating losses, and expect to incur significant additional operating losses.
We began our business in 2017
and have a limited operating history. Although we have enlisted the assistance of pharmaceutical experts, our lack of experience may cause
us to encounter unforeseen problems that could have a material adverse effect on our business and financial condition. Further, there
is limited historical financial information upon which to base an evaluation of our performance.
The drug development and approval process
is uncertain, time-consuming and expensive.
The process of obtaining
and maintaining regulatory approvals for new therapeutic products is lengthy, expensive and uncertain. It also can vary
substantially based on the type, complexity, and novelty of the product. We, or our co-development partners, must provide the FDA
and foreign regulatory authorities with preclinical and clinical data demonstrating that our products are safe and effective before
they can be approved for commercial sale. Clinical development, including preclinical testing, is a long, expensive and uncertain
process. It may take us several years to complete our testing, and failure can occur at any stage of testing. Any preclinical
or clinical test may fail to produce results satisfactory to the FDA. Preclinical and clinical data can be interpreted in different
ways, which could delay, limit or prevent regulatory approval. Negative or inconclusive results from a preclinical study or clinical
trial, adverse medical events during a clinical trial or safety issues resulting from products of the same class of drug could cause
a preclinical study or clinical trial to be repeated or a program to be terminated, even if other studies or trials relating to the
program are successful.
We will be required to sustain and further
build our intellectual property rights.
We do not currently have any
intellectual property rights in our name in respect of our current assets, and instead have rights in respect of our current assets through
agreements with third parties. We intend to fully protect any product, formulation and process that we develop with appropriate intellectual
property registrations. If we fail to sustain and further build our direct and indirect intellectual property rights, competitors will
be able to take advantage of our research and development efforts to develop competing products. If we are not able to protect our proprietary
technology, trade secrets, and know-how, our competitors may use our inventions to develop competing products. Our future patents and
patent applications, even if granted, may not protect us against our competitors. Patent positions generally, including those of other
pharmaceutical and biotechnology companies, are or will be generally uncertain and involve complex legal, scientific and factual questions.
The standards which the United States Patent and Trademark Office uses to grant patents, and the standards which courts use to interpret
patents, are not always applied predictably or uniformly and can change, particularly as new technologies develop. Consequently, the level
of protection, if any, that will be provided by our direct or indirect patent rights from time to time if we attempt to enforce them,
and they are challenged, is uncertain. In addition, the type and extent of patent claims that will be issued to us in the future is uncertain.
Any patents that are issued may not contain claims that permit us to stop competitors from using similar technology.
In addition, we may also rely
on unpatented technology, trade secrets, and confidential information. We may not be able to effectively protect our rights to this technology
or information. Other parties may independently develop substantially equivalent information and techniques or otherwise gain access to
or disclose our technology. We will generally require each of our employees, consultants, collaborators, and certain contractors to execute
a confidentiality agreement at the commencement of an employment, consulting, collaborative, or contractual relationship with us. However,
these agreements may not provide effective protection of our technology or information or, in the event of unauthorized use or disclosure,
they may not provide adequate remedies.
Patent positions are often
uncertain and involve complex legal and factual questions. In addition, the laws of some foreign countries do not protect proprietary
rights to the same extent as the laws of the United States. Whether filed in the United States or abroad, our patent applications
may be challenged or may fail to result in issued patents. In addition, any future patents we obtain may not be sufficiently broad to
prevent others from practicing our technologies or from developing or commercializing competing products. Furthermore, others may independently
develop or commercialize similar or alternative technologies or drugs, or design around our patents. Our patents may be challenged, invalidated
or fail to provide us with any competitive advantages. We may not have the funds available to protect our patents or other technology;
such protection is costly and can result in further litigation expenses.
If we do not obtain or we
are unable to maintain adequate patent or trade secret protection for our products in the United States, competitors could duplicate
them without repeating the extensive testing that we will be required to undertake to obtain approval of the products by the FDA. Regardless
of any patent protection, under the current statutory framework the FDA is prohibited by law from approving any generic version of any
of our products for a period of years that would be determined based on the nature of the product (i.e. an orphan drugs would get
7 years, a new chemical entity would get 5 years and a new clinical investigation would get 3 years). Upon the expiration
of that period, or if that time period is altered, the FDA could approve a generic version of our product unless we have patent protection
sufficient for us to block that generic version. Without sufficient patent protection, the applicant for a generic version of our product
would be required only to conduct a relatively inexpensive study to show that its product is bioequivalent to our product and may not
have to repeat the studies that we will need to conduct to demonstrate that the product is safe and effective. In the absence of adequate
patent protection in other countries, competitors may similarly be able to obtain regulatory approval in those countries of products that
duplicate our products.
We will be required to comply with our obligations
in our intellectual property licenses and other agreements with third parties.
If we fail to comply with
our obligations in our intellectual property licenses and other agreements with third parties, we could lose license rights that are important
to our business. We are not currently party to any intellectual property license agreement with any third parties, but we anticipate that
in-licensing and co-development will be strategies that we utilize as we continue to pursue our growth strategy. We expect to enter into
licenses and co-development and other agreements in the future, and we expect these agreements to impose, various diligences, milestone
payment, royalty, insurance and other obligations on us. If we fail to comply with these obligations, the licensor may have the right
to terminate the license, in which event we might not be able to market any product that is covered by the licensed patents.
We may need to resort to litigation
to enforce or defend our intellectual property rights, including any patents issued to us. If a competitor or collaborator files a patent
application claiming technology also invented by us, in order to protect our rights, we may have to participate in an expensive and time-consuming
interference proceeding before the United States Patent and Trademark Office. We cannot guarantee that our product candidates will
be free of claims by third parties alleging that we have infringed their intellectual property rights. Third parties may assert that we
are employing their proprietary technologies without authorization and they may resort to litigation to attempt to enforce their rights.
Third parties may have or obtain patents in the future and claim that the use of our technology or any of our product candidates infringes
their patents. We may not be able to develop or commercialize combination product candidates because of patent protection others have.
Our business will be harmed if we cannot obtain a necessary or desirable license, can obtain such a license only on terms we consider
to be unattractive or unacceptable, or if we are unable to redesign our product candidates or processes to avoid actual or potential patent
or other intellectual property infringement. Obtaining, protecting and defending patent and other intellectual property rights can be
expensive and may require us to incur substantial costs, including the diversion of management and technical personnel. An unfavorable
ruling in patent or intellectual property litigation could subject us to significant liabilities to third parties, require us to cease
developing, manufacturing or selling the affected products or using the affected processes, require us to license the disputed rights
from third parties, or result in awards of substantial damages against us.
There can be no assurance
that we would prevail in any intellectual property infringement action, will be able to obtain a license to any third-party intellectual
property on commercially reasonable terms, successfully develop non-infringing alternatives on a timely basis, or license non-infringing
alternatives, if any exist, on commercially reasonable terms. Any significant intellectual property impediment to our ability to develop
and commercialize our products could seriously harm our business and prospects.
Patent litigation or other litigation in
connection with our intellectual property rights may lead to publicity that may harm our reputation and the value of our common stock
may decline.
During the course of any patent
litigation, there may be public announcements of the results of hearings, motions, and other interim proceedings or developments in the
litigation. If securities analysts or investors regard these announcements as negative, the value of our common stock may decline. General
proclamations or statements by key public figures may also have a negative impact on the perceived value of our intellectual property.
Protecting and defending against intellectual
property claims may have a material adverse effect on our business.
From time to time, we may
receive notice that others have infringed on our proprietary rights or that we have infringed on the intellectual property rights of others.
There can be no assurance that infringement or invalidity claims will not materially adversely affect our business, financial condition
or results of operations. Regardless of the validity or the success of the assertion of claims, we could incur significant costs and diversion
of resources in protecting or defending against claims, which could have a material adverse effect on our business, financial condition
or results of operations. We may not have the funds or resources available to protect our intellectual property.
Our competitors and potential competitors
may develop products and technologies that make ours less attractive or obsolete.
Many companies, universities,
and research organizations developing competing product candidates have greater resources and significantly greater experience in financial,
research and development, manufacturing, marketing, sales, distribution, and technical regulatory matters than we have. In addition, many
competitors have greater name recognition and more extensive collaborative relationships. Our competitors could commence and complete
clinical testing of their product candidates, obtain regulatory approvals, and begin commercial-scale manufacturing of their products
faster than we or our co-development partners are able to for our products. They could develop products that would render our product
candidates and co-development candidates, and those of our collaborators, obsolete and noncompetitive. If we are unable to compete effectively
against these companies, then we may not be able to commercialize our product candidates or achieve a competitive position in the market.
This would adversely affect our ability to generate revenues.
Competition in the biotechnology and pharmaceutical
industries may result in competing products, superior marketing of other products and lower revenues or profits for us.
There are many companies that
are seeking to develop products and therapies for the treatment of the same diseases that we are currently targeting. Many of our competitors
have substantially greater financial, technical, human and other resources than we do and may be better equipped to develop, manufacture
and market technologically superior products. In addition, many of these competitors have significantly greater experience than we do
in undertaking preclinical testing and human clinical studies of new pharmaceutical products and in obtaining regulatory approvals of
human therapeutic products. Accordingly, our competitors may succeed in obtaining FDA approval for superior products.
Other risks and uncertainties
include:
· market acceptance of our products and services.
· our ability to identify new patients for our products and services.
Positive or timely results
from preclinical studies and early clinical trials do not ensure positive or timely results in late-stage clinical trials or product approval
by the FDA or any other regulatory authority. Product candidates that show positive preclinical or early clinical results often fail in
later stage clinical trials. Data obtained from preclinical and clinical activities is susceptible to varying interpretations, which could
delay, limit, or prevent regulatory approvals.
We have limited experience
in conducting the clinical trials required to obtain regulatory approval. We may not be able to conduct clinical trials at preferred sites,
enlist clinical investigators, enroll sufficient numbers of participants, or begin or successfully complete clinical trials in a timely
fashion, if at all. Any failure to perform may delay or terminate the trials. Once Phase 1 human trials are initiated, the pre-defined
clinical outcome(s) may not be achieved. As a result, additional clinical trials may be required if clinical trial results are negative
or inconclusive, which will require us to incur additional costs and significant delays. If we do not receive the necessary regulatory
approvals, we will not be able to generate product revenues and may not become profitable.
The Company’s business and operations
could be negatively affected if it becomes subject to any securities litigation or shareholder activism, which could cause the Company
to incur significant expense, hinder execution of business and growth strategy and impact its stock price.
In the past, following periods
of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that
company. Shareholder activism, which could take many forms or arise in a variety of situations, has been increasing recently. Volatility
in the stock price of the common stock or other reasons may in the future cause it to become the target of securities litigation or shareholder
activism. Securities litigation and shareholder activism, including potential proxy contests, could result in substantial costs and divert
management’s and board of directors’ attention and resources from the Company’s business. Additionally, such securities
litigation and shareholder activism could give rise to perceived uncertainties as to the Company’s future, adversely affect its
relationships with service providers and make it more difficult to attract and retain qualified personnel. Also, the Company may be required
to incur significant legal fees and other expenses related to any securities litigation and activist shareholder matters. Further, its
stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any
securities litigation and shareholder activism.
Risk Related to Regulation
The regulatory approval process is costly
and lengthy, and we may not be able to successfully obtain all required regulatory approvals.
The preclinical development,
clinical trials, manufacturing, marketing and labeling of pharmaceuticals are all subject to extensive regulation by numerous governmental
authorities and agencies in the United States and other countries. We must obtain regulatory approval for each of our product candidates
before marketing or selling any of them. It is not possible to predict how long the approval processes of the FDA or any other applicable
federal or foreign regulatory authority or agency for any of our products will take or whether any such approvals ultimately will be granted.
The FDA and foreign regulatory agencies have substantial discretion in the drug approval process, and positive results in preclinical
testing or early phases of clinical studies offer no assurance of success in later phases of the approval process. Generally, preclinical
and clinical testing of products can take many years and require the expenditure of substantial resources, and the data obtained
from these tests and trials can be susceptible to varying interpretations that could delay, limit or prevent regulatory approval. If we
encounter significant delays in the regulatory process that result in excessive costs, this may prevent us from continuing to develop
our product candidates. Any delay in obtaining, or failure to obtain, approvals could adversely affect the marketing of our products and
our ability to generate product revenue. The risks associated with the approval process include:
· limitation on the indicated uses for which a product may be marketed;
· unforeseen safety issues or side effects; and
Even if we receive regulatory approvals
for marketing our product candidates, if we fail to comply with continuing regulatory requirements, we could lose our regulatory approvals,
and our business would be adversely affected.
The FDA continues to review
products even after they receive initial approval. If we receive approval to commercialize any product candidates, the manufacturing,
marketing and sale of these drugs will be subject to continuing regulation, including compliance with quality systems regulations, good
manufacturing practices, adverse event requirements, and prohibitions on promoting a product for unapproved uses. Enforcement actions
resulting from our failure to comply with government and regulatory requirements could result in fines, suspension of approvals, withdrawal
of approvals, product recalls, product seizures, mandatory operating restrictions, criminal prosecution, civil penalties and other actions
that could impair the manufacturing, marketing and sale of our potential products and our ability to conduct our business.
Even if we are able to obtain regulatory
approvals for any of our product candidates, if they exhibit harmful side effects after approval, our regulatory approvals could be revoked
or otherwise negatively impacted, and we could be subject to costly and damaging product liability claims.
Even if we receive regulatory
approval for our product candidates, we will have tested them in only a small number of patients during our clinical trials. If our applications
for marketing are approved and more patients begin to use our product, new risks and side effects associated with our products may be
discovered. As a result, regulatory authorities may revoke their approvals; we may be required to conduct additional clinical trials,
make changes in labeling of our product, reformulate our product or make changes and obtain new approvals for our and our suppliers’
manufacturing facilities. We might have to withdraw or recall our products from the marketplace. We may also experience a significant
drop in the potential sales of our product if and when regulatory approvals for such product are obtained, experience harm to our reputation
in the marketplace or become subject to lawsuits, including class actions. Any of these results could decrease or prevent any sales of
our approved product or substantially increase the costs and expenses of commercializing and marketing our product.
Healthcare reform measures could adversely
affect our business.
The efforts of governmental
and third-party payers to contain or reduce the costs of healthcare may adversely affect the business and financial condition of pharmaceutical
companies. In the United States and in foreign jurisdictions there have been, and we expect that there will continue to be, a number
of legislative and regulatory proposals aimed at changing the healthcare system. For example, in some countries other than the United States,
pricing of prescription drugs is subject to government control, and we expect proposals to implement similar controls in the United States
to continue. The pendency or approval of such proposals could result in a decrease in our common stock value or limit our ability to raise
capital or to enter into collaborations or license rights to our products.
Federal legislation may increase the pressure
to reduce prices of pharmaceutical products paid for by Medicare, which could adversely affect our revenues, if any.
The Medicare Prescription
Drug Improvement and Modernization Act of 2003, or MMA, expanded Medicare coverage for drug purchases by the elderly and disabled
beginning in 2006. The legislation uses formularies, preferred drug lists and similar mechanisms that may limit the number of drugs that
will be covered in any therapeutic class or reduce the reimbursement for some of the drugs in a class. More recently, the Patient Protection
and Affordable Care Act of 2010 also contained certain provisions with the potential to affect pricing of pharmaceutical products.
As a result of the expansion
of legislation, including recent healthcare insurance legislation, and the expansion of federal coverage of drug products, we expect that
there will be additional pressure to contain and reduce costs. These cost reduction initiatives could decrease the coverage and price
that we receive for our products in the future and could seriously harm our business. While the MMA applies only to drug benefits for
Medicare beneficiaries, private payers often follow Medicare coverage policy and payment limitations in setting their own reimbursement
systems, and any limits on or reductions in reimbursement that occur in the Medicare program may result in similar limits on or reductions
in payments from private payers.
Federal laws or regulations on drug importation
could make lower cost versions of our future products available, which could adversely affect our revenues, if any.
The prices of some drugs are
lower in other countries than in the United States because of government regulation and market conditions. Various proposals have
been advanced to permit the importation of drugs from other countries to provide lower cost alternatives to the products available in
the United States. In addition, the MMA requires the Secretary of Health and Human Services to promulgate regulations for drug reimportation
from Canada into the United States under some circumstances, including when the drugs are sold at a lower price than in the United States.
A prime example of the effort to provide safe, lower cost drugs to consumers is Safe Importation Action Plan that was released by the
Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA), which plan is describes steps the HHS and FDA
will take to allow the safe importation of certain drugs originally intended for non-US markets. If the laws or regulations are changed
to permit or more easily permit the importation of drugs into the United States in circumstances that are currently not permitted,
such a change could have an adverse effect on our business by making available lower priced alternatives to our future products.
Failure to obtain regulatory and pricing
approvals in foreign jurisdictions could delay or prevent commercialization of our products abroad.
If we succeed in developing
any products, we intend to market them in the European Union and other foreign jurisdictions. In order to do so, we must obtain separate
regulatory approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can
involve additional testing. The time required to obtain approval abroad may differ from that required to obtain FDA approval. The foreign
regulatory approval process may include all of the risks associated with obtaining FDA approval and additional risks associated with requirements
particular to those foreign jurisdictions where we will seek regulatory approval of our products. We may not obtain foreign regulatory
approvals on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities in other countries, and
approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA.
We and our collaborators may not be able to file for regulatory approvals and may not receive necessary approvals to commercialize our
products in any market outside the United States. The failure to obtain these approvals could materially adversely affect our business,
financial condition and results of operations.
Risks Related to Our Organization and Structure
Our holding company structure makes us dependent
on our subsidiaries for our cash flow and could serve to subordinate the rights of our shareholders to the rights of creditors of our
subsidiaries, in the event of an insolvency or liquidation of any such subsidiary.
Our Company acts as a holding
company and, accordingly, substantially all of our operations are conducted through our subsidiaries. Such subsidiaries will be separate
and distinct legal entities. As a result, substantially all of our cash flow will depend upon the earnings of our subsidiaries. In addition,
we will depend on the distribution of earnings, loans or other payments by our subsidiaries. No subsidiary will have any obligation to
provide our company with funds for our payment obligations. If there is an insolvency, liquidation or other reorganization of any of our
subsidiaries, our shareholders will have no right to proceed against their assets. Creditors of those subsidiaries will be entitled to
payment in full from the sale or other disposal of the assets of those subsidiaries before our company, as a shareholder, would be entitled
to receive any distribution from that sale or disposal.
Delaware law and the Amended and Restated
Certificate of Incorporation and Bylaws contain certain provisions, including anti-takeover provisions that limit the ability of stockholders
to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.
The Company’s Amended
and Restated Certificate of Incorporation and Bylaws, and the DGCL, contain provisions that could have the effect of rendering more difficult,
delaying, or preventing an acquisition deemed undesirable by the Company Board and therefore depress the trading price of the common stock.
These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated
by the current members of the Company Board or taking other corporate actions, including effecting changes in management. Among other
things, the Amended and Restated Certificate of Incorporation and Bylaws include provisions regarding:
These provisions, alone or
together, could delay or prevent hostile takeovers and changes in control or changes in the Company Board or management.
In addition, as a Delaware
corporation, the Company will generally be subject to provisions of Delaware law, including Section 203 of the DGCL.
Any provision of the Amended
and Restated Certificate of Incorporation, Bylaws or Delaware law that has the effect of delaying or preventing a change in control could
limit the opportunity for stockholders to receive a premium for their shares of the Company’s capital stock and could also affect
the price that some investors are willing to pay for the common stock.
The Amended and Restated Certificate of
Incorporation designates a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes
between the Company and its stockholders, which could limit the Company’s stockholders’ ability to choose the judicial forum
for disputes with the Company or its directors, officers, or employees.
The Amended and Restated Certificate
of Incorporation will provide that, unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery
of the State of Delaware, or if such court does not have subject matter jurisdiction, any other court located in the State of Delaware
with subject matter jurisdiction, will be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf
of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer,
other employee or stockholder of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim
against the Company or its officers or directors arising pursuant to any provision of the DGCL or the Amended and Restated Certificate
of Incorporation or Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (iv) any
action asserting a claim against the Company or any director or officer of the Company governed by the internal affairs doctrine of the
law of the State of Delaware; provided, that, if and only if the Court of Chancery of the State of Delaware dismisses any such action
for lack of subject matter jurisdiction, such action may be brought in another state court sitting in the State of Delaware. Additionally,
the Amended and Restated Certificate of Incorporation will provide that, unless the Company consents to the selection of an alternative
forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and
exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act; provided, however, that
such provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act, or any other claim for
which the federal courts have exclusive jurisdiction. However, there is uncertainty as to whether a court would enforce this provision
and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities
Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the
Securities Act or the rules and regulations thereunder.
Any person or entity purchasing
or otherwise acquiring any interest in any of the securities of the Company will be deemed to have notice of and consented to these provisions.
These exclusive-forum provisions may limit or make more costly a stockholder’s ability to bring a claim in a judicial forum of its
choosing for disputes with the Company or its directors, officers, or other employees, which may discourage lawsuits against the Company
and its directors, officers, and other employees. If a court were to find these exclusive-forum provisions to be inapplicable or unenforceable
in an action, the Company may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm its
results of operations.
Risks Related to Our Capital Requirements and
Capital Structure
Nasdaq may delist the Company’s securities
from trading on its exchange, which could limit investors’ ability to make transactions in the Company’s securities and subject
the Company to additional trading restrictions.
The Company’s securities
are currently listed on The Nasdaq Capital Market (“Nasdaq”) effective as of the opening of business on June 13, 2023, and
it is anticipated that the Company’s securities will continue to be listed on The Nasdaq Capital Market. However, there can be no
assurance that the Company’s securities will maintain such listing at all times. To maintain the listing of the Company’s
securities on Nasdaq, the Company must maintain certain financial, distribution, liquidity and stock price levels to satisfy Nasdaq’s
continued listing requirements. The Company must, among other things, maintain a minimum bid price of $1.00 per share, a minimum market
value of listed securities of $35 million and a minimum of 300 public shareholders. The foregoing is a brief description of The Nasdaq
Capital Market continued listing requirements applicable to the Company’s securities, and more detailed information about such requirements
is set forth in Nasdaq Rules 5550 and 5560. If the Company is unable to maintain a minimum bid price for its shares of $1.00 per share,
or to satisfy any other continued listing requirement, Nasdaq may delist the Company’s securities from trading on its exchange.
Such a delisting would likely have a negative effect on the price of the Company’s securities and may impair your ability to sell
or purchase the Company’s securities when you wish to do so.
On January 29, 2024, we received
notice from the Listing Qualifications Staff of Nasdaq indicating that, based upon the closing bid price of our common stock for the prior
30 consecutive business days, we were not in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued
listing on Nasdaq as set forth In Nasdaq Listing Rule 5550(a)(2). At that time, the Company was provided a compliance period of 180 calendar
days, or until July 29, 2024, to regain compliance with the Minimum Bid Price Requirement, pursuant to Nasdaq Listing Rule 5810(c)(3)(A).
As previously disclosed, on July 30, 2024, Coeptis received a letter from the Listing Qualifications Staff of Nasdaq indicating that the
Company did not regain compliance with the Minimum Bid Price Requirement by July 29, 2024, and it was determined that the Company was
not eligible for another 180 calendar-day extension because it did not meet the minimum stockholders’ equity initial listing requirements
of $5,000,000 for Nasdaq, as set forth under Nasdaq Listing Rule 5505(b). The Company appealed the decision, as previously disclosed.
On September 17, 2024, the Company received a letter from Nasdaq advising the Company that the Company was granted an extension through
January 15, 2025, to regain listing compliance. On January 21, 2025, the Company was notified by Nasdaq that the Company has regained
compliance with the minimum bid price of $1.00, and that Nasdaq has determined to continue the listing of the Company’s securities.
If Nasdaq delists the Company’s
securities from trading on its exchange and the Company is not able to list its securities on another Nasdaq trading tier or on another
national securities exchange, the Company’s securities may be quoted on an over-the-counter market. However, if this were to occur,
the Company could face significant material adverse consequences, including:
· a limited availability of market quotations for its securities;
· reduced liquidity for its securities;
· a limited amount of news and analyst coverage; and
If securities or industry analysts do not
publish research or reports about our business or publish negative reports about our business or our industry, the trading price and volume
of our securities could decline.
The trading market for our
securities will depend in part on the research and reports that securities or industry analysts publish about us or our business, our
market and our competitors. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade our
shares or change their opinion of our shares, the trading price for our securities would likely decline. If one or more of these analysts
cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could
cause the trading price or volume of our securities to decline.
We are an “emerging growth company”
and the reduced disclosure requirements applicable to emerging growth companies may make our securities less attractive to investors.
We are an “emerging
growth company,” as defined in the JOBS Act. For so long as we remain an emerging growth company, we are permitted and plan to rely
on exemptions from certain disclosure requirements that are applicable to public companies that are not emerging growth companies. These
provisions include, but are not limited to: an exemption from compliance with the auditor attestation requirement in the assessment of
our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act; reduced disclosure obligations regarding
executive compensation arrangements in our periodic reports, registration statements and proxy statements; and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
approved. In addition, the JOBS Act permits emerging growth companies to take advantage of an extended transition period to comply with
new or revised accounting standards applicable to public companies. We intend to take advantage of the exemptions discussed above. As
a result, the information we provide will be different than the information that is available with respect to other public companies that
are not emerging growth companies or that are not taking advantage of such exemptions.
We will remain an emerging
growth company until the earliest of (i) December 31, 2027, (ii) the first fiscal year after our annual gross revenue
exceed $1.07 billion, (iii) the date on which we have, during the immediately preceding three-year period, issued more than $1.00
billion in non-convertible debt securities, or (iv) the end of any fiscal year in which the market value of our common stock
held by non-affiliates exceeds $700.0 million as of the end of the second quarter of that fiscal year.
We cannot predict whether
investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive
as a result, there may be a less active trading market for our securities, and the market price of our securities may be more volatile.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Cybersecurity Risk Management and Strategy
The Company recognizes the
importance of cybersecurity in safeguarding its information systems and data. Our cybersecurity measures primarily rely on standard security
protocols provided by Microsoft Outlook and OneDrive, which include encryption, multi-factor authentication, and access controls to protect
against unauthorized access and data breaches.
Given the evolving nature
of cybersecurity threats, the Company monitors its systems for potential vulnerabilities and relies on third-party security updates and
patches to mitigate risks. While we believe our current measures are appropriate for our operations, we acknowledge that no security system
is entirely immune from potential threats, including phishing attacks, malware, ransomware, and unauthorized access.
Governance and Oversight
The Company’s executive
management is responsible for overseeing cybersecurity risks and ensuring compliance with our security practices. At this time, the Company
does not have a dedicated cybersecurity team but relies on its IT service providers and Microsoft’s security framework for system
protection and incident response.
Potential Risks and Impact
Despite these measures, the
Company may be vulnerable to cybersecurity incidents that could disrupt operations, compromise sensitive data, or result in financial
or reputational harm. Any material cybersecurity incident would be assessed and disclosed as necessary.
ITEM 2. PROPERTIES
Our principal place of business
is located at 105 Bradford Street, Suite 420, Wexford, Pennsylvania 15090, which we lease. The lease is scheduled to expire on May 31,
2026.
We do not own any properties or land.
We believe our facilities
are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative space will be available.