Xenetic Biosciences Inc
For the period ended Dec 31, 2023. Filed Mar 21, 2024.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2023 · Filed Mar 21, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Table of Contents
TABLE CONTENTS
| PART I | 1 | ||
|---|---|---|---|
| Item 1 | Business | 1 | |
| Item 1A | Risk Factors | 23 | |
| Item 1B | Unresolved Staff Comments | 52 | |
| Item 1C | Cybersecurity | 52 | |
| Item 2 | Properties | 53 | |
| Item 3 | Legal Proceedings | 53 | |
| Item 4 | Mine Safety Disclosures | 53 | |
| PART II | 54 | ||
| Item 5 | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 54 | |
| Item 6 | [Reserved] | 54 | |
| Item 7 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 54 | |
| Item 7A | Quantitative and Qualitative Disclosures About Market Risk | 62 | |
| Item 8 | Financial Statements and Supplementary Data | 63 | |
| Item 9 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 64 | |
| Item 9A | Controls and Procedures | 64 | |
| Item 9B | Other Information | 65 | |
| Item 9C | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 65 | |
| PART III | 66 | ||
| Item 10 | Directors, Executive Officers and Corporate Governance | 66 | |
| Item 11 | Executive Compensation | 66 | |
| Item 12 | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 66 | |
| Item 13 | Certain Relationships and Related Transactions, and Director Independence | 66 | |
| Item 14 | Principal Accounting Fees and Services | 66 | |
| PART IV | 67 | ||
| Item 15 | Exhibits and Financial Statement Schedules | 67 | |
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (“Annual Report”) contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended. All statements contained in this Annual Report other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, future revenues, projected costs, prospects and our objectives for future operations, are forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning: anticipated effects of geopolitical events, including the conflicts in the Ukraine and the Middle East and associated sanctions imposed by the United States (“U.S.”) and other countries in response; our plans to develop our proposed drug candidates; our expectations regarding the nature, timing and extent of clinical trials and proposed clinical trials; our expectations regarding the timing for proposed submissions of regulatory filings, including but not limited to, any Investigational New Drug (“IND”) filing or any New Drug Application (“NDA”); the nature, timing and extent of collaboration arrangements; the expected results pursuant to collaboration arrangements, including the receipts of future payments that may arise pursuant to collaboration arrangements; the outcome of our plans to obtain regulatory approval of our drug candidates; the outcome of our plans for the commercialization of our drug candidates; our plans to address certain markets, engage third party manufacturers, and evaluate additional drug candidates for subsequent commercial development along with the likelihood and extent of competition to our drug candidates; our plans to advance innovative immune-oncology technologies addressing hard to treat oncology indications; expectations regarding our Deoxyribonuclease (“DNase”) platform, such as regarding the DNase platform being in development for the treatment of solid tumors and being aimed at improving outcomes of existing treatments, including immunotherapies, by targeting neutrophil extracellular traps (“NETs”) and our expectations to prioritize our efforts and resources on this newly licensed technology; our expectations regarding our PolyXen® platform; and all statements under the heading “Opportunity to Address Multiple Oncology Indications”.
In some cases, these statements may be identified by terminology such as “may,” “will,” “would,” “could,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “seek,” “approximately,” “intend,” “predict,” “potential,” “projects,” “upcoming”, “opportunity”, “target” or “continue,” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, we cannot guarantee future results, the levels of activity, performance or achievements. These statements involve known and unknown risks and uncertainties that may cause our or our industry's results, levels of activity, performance or achievements to be materially different from those expressed or implied by forward-looking statements.
Some factors that could cause actual results to differ materially include without limitation:
| · | uncertainty of the expected financial performance of the Company; |
| · | failure to realize the anticipated potential of the DNase or PolyXen technologies; |
| · | our ability to implement our business strategy; |
| · | our failure to maintain compliance with the continued listing requirements of the Nasdaq Stock Market; |
| · | our need to raise additional working capital in the future for the purpose of further developing our pipeline and to continue as a going concern; |
| · | our ability to finance our business; |
| · | our ability to successfully execute, manage and integrate key acquisitions and mergers; |
| · | product development and commercialization risks, including our ability to successfully develop the DNase technology; |
| · | the impact of adverse safety outcomes and clinical trial results for our therapies; |
| · | our ability to secure and maintain a manufacturer for our technologies; |
| · | the impact of new therapies and new uses of existing therapies on the competitive environment; |
ii
| · | our ability to successfully commercialize our current and future drug candidates; |
| · | our ability to achieve milestone and other payments associated with our current and future co-development collaborations and strategic arrangements; |
| · | our reliance on consultants, advisors, vendors and business partners to conduct work on our behalf; |
| · | the impact of new technologies on our drug candidates and our competition; |
| · | changes in laws or regulations of governmental agencies; |
| · | interruptions or cancellation of existing contracts; |
| · | impact of competitive products and pricing; |
| · | product demand and market acceptance and risks; |
| · | the presence of competitors with greater financial resources; |
| · | continued availability of supplies or materials used in manufacturing at the current prices; |
| · | the ability of management to execute plans and motivate personnel in the execution of those plans; |
| · | our ability to attract and retain key personnel; |
| · | adverse publicity related to our products or the Company itself; |
| · | adverse claims relating to our intellectual property; |
| · | the adoption of new, or changes in, accounting principles; |
| · | the costs inherent with complying with statutes and regulations applicable to public reporting companies, such as the Sarbanes-Oxley Act of 2002; |
| · | other new lines of business that the Company may enter in the future; |
| · | general economic and business conditions, as well as inflationary trends and financial market instability or disruptions to the banking system due to bank failures; |
| · | the impact of natural disasters or public health emergencies, such as the COVID-19 global pandemic, and geopolitical events, such as the Russian invasion of Ukraine and conflict in the Middle East, and related sanctions and other economic disruptions or concerns, on our financial condition and results of operations; and |
| · | other factors set forth in the Risk Factors section of our Annual Report on Form 10-K and in subsequent filings with the Securities and Exchange Commission (“SEC”). |
These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in the forward-looking statements in this Annual Report. Other unknown or unpredictable factors also could have material adverse effects on our future results, including, but not limited to, those discussed in the section titled “Risk Factors.” The forward-looking statements in this Annual Report are made only as of the date of this Annual Report, and we do not undertake any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances. We intend that all forward-looking statements be subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.
As used in this Annual Report, unless otherwise indicated, all references herein to “Xenetic,” the “Company,” “we” or “us” refer to Xenetic Biosciences, Inc. and its wholly-owned subsidiaries.
Our brand and product names, including but not limited to, XDNASE™, XCART™, OncoHist™, PolyXen®, ErepoXen™ and ImuXen™ contained in this Annual Report are trademarks, registered trademarks or service marks of Xenetic Biosciences, Inc. and/or its subsidiaries in the United States of America (“USA” or “U.S.”) and certain other countries. All other company and product names may be trademarks of the respective companies with which they are associated.
iii
Summary Risk Factors
Our business is subject to numerous risks. In addition to the summary below, you should carefully review the “Risk Factors” section of this Annual Report on Form 10-K. We may be subject to additional risks and uncertainties not presently known to us or that we currently deem immaterial. These risks should be read in conjunction with the other information in this Annual Report on Form 10-K. Some of the principal risks relating to our business include:
| · | We have never been profitable and may never achieve or sustain profitability. If we are unable to generate sufficient revenue from our operations to pay expenses or we are unable to obtain additional financing on commercially reasonable terms, our business, financial condition and results of operations may be materially and adversely affected. |
| · | We will require substantial additional funding to achieve our goals. Failure to obtain this necessary capital when needed on acceptable terms, or at all, may force us to delay, limit or terminate our product development efforts, other operations or commercialization efforts. |
| · | Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or drug candidates. |
| · | We may not continue to meet the continued listing requirements of the Nasdaq Stock Market (“Nasdaq”), which could result in a delisting of our common shares. |
| · | Our business is substantially dependent on the success of the DNase oncology platform. |
| · | We operate in an extremely competitive environment and there can be no assurances that competing technologies would not harm our business development. |
| · | We are an early-stage company in the business of developing pharmaceutical products including drug candidates and technologies. Given the uncertainty of such development, our business operations may never fully materialize and create value for investors. |
| · | If conflicts arise between us and our collaborators or strategic partners, these parties may act in their self-interest, which may limit our ability to implement our strategies. |
| · | We expect to rely on third parties to conduct, supervise and monitor our clinical studies, and if these third parties perform in an unsatisfactory manner, it may harm our business. |
| · | Our collaborators or strategic partners may decide to adopt alternative technologies or may be unable to develop commercially viable products with our technology, which would negatively impact our revenues and our strategy to develop these products. |
| · | We may seek to establish additional collaborations and, if we are not able to establish them on commercially reasonable terms, we may have to alter our development and commercialization plans. |
| · | If we enter into one or more collaborations, we may be required to relinquish important rights to and control over the development of our drug candidates or otherwise be subject to unfavorable terms. |
| · | We may find it difficult to enroll patients in our clinical studies, which could delay or prevent clinical studies of our pharmaceutical products. |
iv
| · | We may encounter substantial delays in commencement, enrollment or completion of our clinical trials, or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities, which could prevent us from commercializing our current and future drug candidates on a timely basis, if at all. |
| · | If we complete the necessary preclinical and clinical studies, we cannot predict when or if we will obtain regulatory approval to commercialize a drug candidate, or the approval may be for a more narrow indication than we expect. |
| · | If we obtain regulatory approval for a drug candidate, our drug candidate will remain subject to regulatory scrutiny. |
| · | The commercial success of any current or future pharmaceutical products will depend upon the degree of market acceptance by physicians, patients, third-party payors and others in the medical community. |
| · | The commercial potential of a pharmaceutical candidate in development is difficult to predict. If the market size for a new drug candidate or technology is significantly smaller than we anticipate, it could significantly and negatively impact our revenue, results of operations and financial condition. |
| · | Failure to obtain or maintain adequate coverage and reimbursement for our drug candidates, if approved, could limit our ability to market those products and decrease our ability to generate revenue. |
| · | We may use our financial and human resources to pursue a particular research program or drug candidate and fail to capitalize on programs or drug candidates that may be more profitable or for which there is a greater likelihood of success. |
| · | We may not be successful in our efforts to identify or discover additional pharmaceutical products. |
| · | The market opportunities for our drug candidates may be limited to those patients who are ineligible for or have failed prior treatments and may be small. |
| · | We have no manufacturing, sales, marketing or distribution capabilities, and we may have to invest a significant amount of resources to develop these capabilities. |
| · | Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed. |
| · | If we fail to adequately protect or enforce our intellectual property rights, we may be unable to operate effectively. |
| · | Issued patents covering our drug candidates could be found invalid or unenforceable if challenged in court. |
| · | We may not be able to protect our intellectual property rights throughout the world. |
| · | If we infringe on the intellectual property rights of others, our business and profitability may be adversely affected. |
| · | If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third-parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business. |
| · | We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers. |
v
| · | We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property. |
| · | Our inability to protect our confidential information and trade secrets would harm our business and competitive position. |
| · | Our future success depends on our ability to retain principal members of our executive team, consultants and advisors and to attract, retain and motivate qualified personnel. |
| · | We will need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations. |
| · | We are a party to collaboration agreements and other significant agreements which contain complex commercial terms that could result in disputes, litigation or indemnification liability that could adversely affect our business, results of operations and financial condition. |
| · | The market price of our securities may be highly volatile, and you may not be able to sell our securities. |
| · | Actions of activist shareholders could cause us to incur substantial costs, divert management's attention and resources, and have an adverse effect on our business. |
| · | Our preferred stockholders have rights, preferences and privileges that are not held by, and are preferential to, the rights of our common stockholders, which could result in the interests of our preferred stockholders differing from those of our common stockholders. |
vi
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.