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| PART I | | | 7 |
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| Item 1. | Business | | 7 |
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| Item 1A. | Risk Factors | | 17 |
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| Item 1B. | Unresolved Staff Comments | | 45 |
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| Item 1C. | Cybersecurity | | 45 |
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| Item 2. | Properties | | 46 |
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| Item 3. | Legal Proceedings | | 47 |
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| Item 4. | Mine Safety Disclosures | | 47 |
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| PART II | | | 47 |
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| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | 47 |
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| Item 6. | [Reserved] | | 48 |
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 48 |
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| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | | 54 |
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| Item 8. | Financial Statements and Supplementary Data | | 54 |
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| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | | 54 |
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| Item 9A. | Controls and Procedures | | 55 |
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| Item 9B. | Other Information | | 56 |
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| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | | 56 |
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| PART III | | | 56 |
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| Item 10. | Directors, Executive Officers and Corporate Governance | | 56 |
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| Item 11. | Executive Compensation | | 63 |
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| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | 68 |
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| Item 13. | Certain Relationships and Related Transactions, and Director Independence | | 72 |
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| Item 14. | Principal Accountant Fees and Services | | 73 |
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| PART IV | | | 74 |
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| Item 15. | Exhibits and Financial Statement Schedules | | 74 |
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SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed in this report may constitute forward-looking statements for purposes of the Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. The words “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “would,” “potential,” “continue,” “anticipate,” “believe,” “estimate,” “may,” “expect” and similar expressions are generally intended to identify forward-looking statements. These forward-looking statements are based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.
Our actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation, those discussed under the captions “Risk Factors,” and elsewhere in this report. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements. Such forward-looking statements include, but are not limited to, statements about:
| ● | expectations for increases or decreases in expenses; |
| ● | the success and timing of our clinical trials and preclinical studies, including safety and efficacy, for our product candidate NXP900 and any future product candidates that we may have, including patient accrual and retention, safety and/or tolerability issues, efficacy data and the usability of data generated from our trials for regulatory submissions; |
| ● | our ability to obtain regulatory approvals for our product candidates; |
| ● | expectations for incurring expenditures related to our research and development and manufacturing of our product candidates; |
| ● | the sufficiency of our existing cash and cash equivalents and investments to finance our operating requirements, including expectations regarding the value and liquidity of our investments; |
| ● | expectations for generating revenue or becoming profitable on a sustained basis; |
| ● | the impact of health epidemics on our business and the actions we may take in response thereto; |
| ● | developments and projections relating to our competitors, regulatory environment and industry; |
| ● | our expectations about how market trends will affect our business; |
| ● | our and our licensors’ ability to obtain, establish, maintain, protect and enforce intellectual property and proprietary protection for our products and technologies and to avoid claims of infringement, misappropriation or other violation of third-party intellectual property and proprietary rights; |
| ● | our ability to attract and retain key personnel and to manage our future growth effectively; |
| ● | expectations for future capital requirements; |
| ● | the volatility of the trading price of our common stock; and |
| ● | our expectations regarding the period during which we qualify as an emerging growth company under the Jumpstart Our Business Startups Act. |
The forward-looking statements contained in this report reflect our views and assumptions as of the date of this report. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. Except as required by law, we assume no responsibility for updating any forward-looking statements.
We qualify all of our forward-looking statements by these cautionary statements. In addition, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
SUMMARY OF RISK FACTORS
An investment in our common stock is subject to a broad range of risks and should only be made after a careful consideration of such risks. For a discussion of some of the risks you should consider before purchasing our common stock, you are urged to carefully review and consider the section entitled “Risk Factors.”
Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows and prospects that you should consider before making a decision to invest in our common stock. These risks are discussed more fully in the section entitled “Risk Factors”, and include the following:
Risks Related to our Financial Condition and Capital Requirements
| ● | We have a limited operating history, and have initiated and completed only a limited number of clinical trials with a small number of patients. We do not have any products approved for commercial sale and have not generated any revenue, which may make it difficult for investors to evaluate our current business and likelihood of success and viability. |
| ● | We have incurred losses since our inception and have not generated any revenue. We expect to incur continued losses for the foreseeable future and may never achieve or maintain profitability. |
| ● | Our ability to generate revenue and achieve profitability depends significantly on our ability to achieve several objectives relating to the discovery or identification, preclinical and clinical development, regulatory approval, and commercialization of our current or future product candidates. |
| ● | We will require substantial additional capital to finance our operations and achieve our goals. If we are unable to raise capital when needed or on terms acceptable to us, we may be forced to delay, reduce, or eliminate our research or product development programs, any future commercialization efforts, or other operations. |
Risks Related to the Development of our Product Candidates
| ● | We are substantially dependent on the success of our product candidate, NXP900. |
| ● | Clinical trials are very expensive, time consuming and difficult to design and implement, and involve uncertain safety, tolerability and efficacy outcomes. Furthermore, results of earlier preclinical studies and clinical trials may not be predictive of results of future preclinical studies or clinical trials. Our current or future product candidates may not have favorable results in early or later clinical trials, if any, or receive regulatory approval. |
| ● | If we fail to demonstrate safety and/or efficacy for any or all of our product candidates, we may need to terminate development programs, which may harm our reputation and the business. |
| ● | The development and commercialization of pharmaceutical products are subject to extensive regulation, and we may not obtain regulatory approvals for NXP900 or any future product candidate. |
| ● | If we are unable to obtain or maintain regulatory approval for our product candidates and ultimately cannot commercialize one or more of them, or experience significant delays in doing so, our business will be materially harmed. |
Risks Related to Government Regulation
| ● | Denial of or delay in our receipt of required regulatory approvals may prevent or delay development and/or commercialization of our current or future product candidates, and our ability to generate revenue may be materially impaired. |
| ● | Even if we receive regulatory approval for our current or future product candidates, we will be subject to ongoing regulatory obligations and continued regulatory oversight, which may result in significant additional expense, and we may be subject to regulatory enforcement action if we fail to comply with regulatory requirements or experience unanticipated problems with our current or future product candidates. |
Risks Related to our Intellectual Property
| ● | If we are unable to obtain and maintain patent protection or other necessary rights for our products and technology, or if the scope of the patent protection obtained is not sufficiently broad or our rights under licensed patents are not sufficiently broad, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully develop and/or commercialize our products and technology may be adversely affected. |
Risks Related to our Reliance on Third Parties
| ● | The manufacture of our current and future product candidates is complex. Our third-party manufacturers may encounter difficulties or interruptions for various reasons, which could delay or entirely halt their ability to manufacture any of our current or future product candidates for clinical trials or, if approved, for commercial sale. |
| ● | We plan to rely on third parties to conduct our preclinical studies and clinical trials. If these third parties do not properly and successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval of or commercialize our current or future product candidates. |
Risks Related to Managing Growth and Employee Matters
| ● | Our future success depends on our ability to retain our executive officers and key employees and to attract, retain and motivate qualified personnel and manage our human capital. |
| ● | We currently have 13 full-time employees and will need to grow the size and capabilities of our organization. We may experience difficulties in managing this growth. |
Risks Related to Commercial Activities
| ● | If any of our current or future product candidates do not achieve broad market acceptance among physicians, patients, healthcare payors, and the medical community, the revenues from any such current or future product candidate may be limited. |
| ● | If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our current or future product candidates. |
Risks Related to Ownership of our Common Stock
| ● | We do not know whether an active, liquid, and orderly trading market will be maintained for our Common Stock or what the market price of our Common Stock will be, and, as a result, it may be difficult for you to sell your shares of our Common Stock. |
