| | | Page |
|---|
| PART I |
|---|
| |
|---|
| Item 1. Business | | 6 |
|---|
| | | |
|---|
| Item 1A. Risk Factors | | 31 |
|---|
| | | |
|---|
| Item 1B. Unresolved Staff Comments | | 72 |
|---|
| | | |
|---|
| Item 1C. Cybersecurity | | 73 |
|---|
| | | |
|---|
| Item 2. Properties | | 74 |
|---|
| | | |
|---|
| Item 3. Legal Proceedings | | 74 |
|---|
| | | |
|---|
| Item 4. Mine Safety Disclosures | | 74 |
|---|
| | | |
|---|
| PART II |
|---|
| |
|---|
| Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | 74 |
|---|
| | | |
|---|
| Item 6. Selected Financial Data | | 75 |
|---|
| | | |
|---|
| Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 76 |
|---|
| | | |
|---|
| Item 7A. Quantitative and Qualitative Disclosures About Market Risk | | 87 |
|---|
| | | |
|---|
| Item 8. Financial Statements and Supplementary Data | | 88 |
|---|
| | | |
|---|
| Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | | 124 |
|---|
| | | |
|---|
| Item 9A. Controls and Procedures | | 124 |
|---|
| | | |
|---|
| Item 9B. Other Information | | 125 |
|---|
| | | |
|---|
| PART III |
|---|
| |
|---|
| Item 10. Directors, Executive Officers and Corporate Governance | | 125 |
|---|
| | | |
|---|
| Item 11. Executive Compensation | | 125 |
|---|
| | | |
|---|
| Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | 125 |
|---|
| | | |
|---|
| Item 13. Certain Relationships and Related Transactions, and Director Independence | | 125 |
|---|
| | | |
|---|
| Item 14. Principal Accounting Fees and Services | | 125 |
|---|
| | | |
|---|
| PART IV |
|---|
| |
|---|
| Item 15. Exhibits and Financial Statement Schedules | | 125 |
|---|
| | | |
|---|
| Item 16. Form 10 K Summary | | 128 |
|---|
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K, including "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Item 7, contains forward-looking statements. All statements other than statements of historical facts contained in this Annual Report on Form 10-K, including statements regarding our future results of operations and financial position, business strategy, prospective products, product approvals, research and development costs, timing and likelihood of success, plans and objectives of management for future operations and future results of anticipated products, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Annual Report on Form 10-K are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Annual Report on Form 10-K and are subject to a number of risks, uncertainties and assumptions described under the sections in this Annual Report on Form 10-K titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Annual Report on Form 10-K. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
SUMMARY OF RISK FACTORS
The following is a summary of the principal risks described below in Part I, Item 1A. “Risk Factors” in this Annual Report on Form 10-K. We believe that the risks described in the “Risk Factors” section are material to investors, but other factors not presently known to us or that we currently believe are immaterial may also adversely affect us. The following summary should not be considered an exhaustive summary of the material risks facing us, and it should be read in conjunction with the “Risk Factors” section and the other information contained in this Annual Report on Form 10-K.
Risks Related to Our Financial Position and Need for Additional Capital
| ● | Our recurring losses from operations raise substantial doubt that we will be able to continue as a going concern and our independent registered public accounting firm has issued an audit report that includes an explanatory paragraph referring to the uncertainty regarding our ability to continue as a going concern without additional capital becoming available. |
| ● | We have incurred losses since inception and anticipate that we will continue to incur losses for the foreseeable future. |
| ● | We will require additional capital to fund our operations. |
| ● | Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates. |
| ● | We have a limited operating history and no history of commercializing pharmaceutical products. |
| ● | Unstable global market and economic conditions may have serious adverse consequences on our business, financial condition and results of operations. |
Risks Related to Development, Clinical Testing, Manufacturing and Regulatory Approval
| ● | We are heavily dependent on the success of our product candidates which are still under clinical development, and if these product candidates do not receive regulatory approval or, if approved, our commercialization efforts are unsuccessful, our business may be harmed. |
| ● | We may face future business disruption and related risks from the spread of infectious disease, which could have a material adverse effect on our business. |
| ● | Clinical trials are expensive, time-consuming and difficult to design and implement, and involve an uncertain outcome. |
| ● | If we are ultimately unable to obtain regulatory approval for any of our product candidates, our business will be substantially harmed. |
| ● | Results of preclinical studies, early clinical trials or analyses may not be indicative of results obtained in later trials. |
| ● | The market opportunities for our product candidates, if approved, may be smaller than we anticipate. |
| ● | We may never obtain approval for or commercialize any product candidate in any other jurisdiction, which would limit our ability to realize their full global market potential. |
Risks Related to Commercialization
| ● | We face significant competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively. |
| ● | Even if any of our product candidates we develop receives marketing approval, it may fail to achieve market acceptance by physicians, patients, third-party payors or others in the medical community necessary for commercial success. |
| ● | If we are unable to establish sales, marketing and distribution capabilities either on our own or in collaboration with third parties, we may not be successful in commercializing an approved product. |
Risks Related to Our Dependence on Third Parties
| ● | We currently rely on third-party contract manufacturing organizations, or CMOs, for the production of clinical supply of our product candidates and intend to rely on CMOs for the production of commercial supply. |
| ● | We intend to rely on third parties to conduct, supervise and monitor our clinical trials. |
Risks Related to Healthcare Laws and Other Legal Compliance Matters
| ● | Enacted and future healthcare legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates. |
| ● | We are subject to environmental, health and safety laws and regulations, and we may become exposed to liability and substantial expenses in connection with environmental compliance or remediation activities. |
| ● | If we become profitable, our ability to use our net operating loss carryforwards and other tax attributes to offset future taxable income or taxes may be subject to limitations. |
Risks Related to Our Intellectual Property
| ● | Our patents may be challenged in courts or in patent offices. |
| ● | Changes in patent laws or patent jurisprudence could diminish the value of patents in general. |
| ● | We enjoy only limited geographical protection with respect to certain patents. |
| ● | We may need to license certain intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms. |
Risks Related to Our Employees, Managing Our Growth and Our Operations
| ● | Our future success depends on our ability to retain our key personnel and to attract, retain and motivate qualified personnel. |
| ● | We expect to expand our development, regulatory, and sales and marketing capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations. |
| ● | We may engage in acquisitions that could disrupt our business, cause dilution to our stockholders or reduce our financial resources. |
| ● | We may be materially adversely affected by currency fluctuations in the United States dollar versus the Canadian dollar. |
Risks Related to Our Common Stock
| ● | If we are unable to maintain listing of our common stock on the Nasdaq Capital Market or another national stock exchange, it may be more difficult for our stockholders to sell their shares of common stock. |
| ● | The market price of our common stock is highly volatile. |
| ● | We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock. |
