Risk Factors Update Summary

• Addition of intellectual property licensing risks related to U.S. government funding and grants.
• The Company may experience significant growth, requiring more employees and resources for operations.
• Addition of new privacy laws in Virginia, Colorado, Connecticut, and Utah in 2023, with more states considering, increasing compliance complexity and risks.
• Expanded risk factors to include dependence on lead product candidate, neflamapimod, still under development.
• Increased expected development costs or potential commercialization delays of neflamapimod for DLB treatment.
• Adverse differences between preliminary and final data could significantly harm business prospects.
• Noted the Company's focus on developing neflamapimod, risking missed opportunities with other potentially profitable products.
• Inclusion of risks related to competition, especially from well-funded pharmaceutical companies.
• The CARES Act eliminated the NOL deduction limit to 80% for taxable years before 2021.
• The Company may need to become involved in lawsuits to protect or enforce its patents, which could be expensive, time-consuming, and unsuccessful. Competitors may infringe the Company's patents, leading to legal claims.
• Emphasized the potential significant future obligations under the Vertex Agreement, including milestone payments and royalties.
• Uncertainty regarding the effect of diversity action plans on future Phase 3 trials and FDA expectations.
• Potential negative impact on business due to delays in enrolling and retaining participants in clinical trials.
• Risks from geopolitical uncertainty due to ongoing military actions and conflicts in Ukraine.
• Increased emphasis on the need for confidentiality agreements to protect trade secrets.
• The Company's patent portfolio may not provide sufficient rights to exclude others from commercializing similar products. This could result in a substantial reduction in demand for the Company's products.
• Risks associated with varying interpretations of clinical data by regulatory agencies and potential impact on product approval.
• Potential impact of the CPRA in California, effective 2023, on compliance costs and liability.
• Introduction of extensive healthcare laws and regulations affecting commercialization and pricing policies.
• Added details on financial position, with accumulated deficit of approximately $54.4 million as of December 31, 2023.
• Expanded post-marketing regulatory requirements and potential penalties for non-compliance.
• The Company identified material weaknesses in internal controls related to complex transactions and expense accounts.
• Risks associated with preliminary and interim data publication, subject to change upon further analysis.
• Changes in patent laws could diminish the value of the Company's patents, impairing its ability to protect its product candidates. The success of the Company heavily depends on intellectual property protection.
• Enhanced disclosure on the potential impact of product liability claims on the company.
• Increased risks from global political uncertainty and sanctions affecting manufacturing and supply chain.
• Heightened focus on the need for adequate coverage and reimbursement for commercial success.
• The Company may need to raise additional capital through various means, potentially resulting in dilution.
• Detailed the Company's reliance on non-dilutive grant funding for the RewinD-LB Trial, subject to government availability.
• Requirement for a diversity action plan for Phase 3 trials may impact planning and timing.
• Increased focus on GDPR compliance and potential penalties, with added emphasis on data protection laws.
• Highlighted the need for additional capital investment due to significant upfront expenditures and risks.
• The Company's common stock may be delisted from Nasdaq, impacting trading liquidity and stockholder confidence.
• Disclosed the private placement of 2,532,285 units, expecting gross proceeds of approximately $50 million.
• Uncertainty from potential disruptions in global economies due to epidemics, pandemics, and public health crises.
• The Company's success is dependent on its ability to develop, manufacture, market, and sell its lead product candidate without infringing on third-party patents. Failure to do so could lead to legal disputes and financial implications.
• The Company's intellectual property rights may not be adequately protected, leading to potential risks.
• Risks associated with financial market disruptions and potential loss of uninsured funds in financial institutions.
• The Company's patent life may not be sufficient to protect its products effectively. Patents have a limited lifespan, and competitors may launch competing products after the Company's patents expire, impacting revenue.
• Cybersecurity incidents could disrupt operations, cause data loss, and result in significant costs.
• Risks related to political events impacting financial markets and the Company's operations.
• The Company may be involved in lawsuits to protect its patents, which could result in substantial costs and divert resources from its business operations. Legal proceedings may lead to adverse decisions and distract management.
• Challenges from integrating artificial intelligence tools and potential cybersecurity risks in operations.
• The Company's concentration of common stock ownership among officers and directors may limit stockholder influence.
• The Company's intellectual property discovered through government-funded programs may be subject to federal regulations, limiting its exclusive rights and ability to contract with non-U.S. manufacturers.