Risk Factors Update Summary

• The company does not anticipate paying cash dividends, retaining earnings for growth instead.
• Changes in tax laws could adversely affect business, financial condition, and future taxable income.
• Increased scrutiny under healthcare laws may lead to substantial penalties and costs.
• Increased risks related to cybersecurity threats, including ransomware attacks, data breaches, and supply chain vulnerabilities.
• Ability to develop, obtain regulatory approval, and market product candidates may be impacted by compliance failures, resulting in sanctions, fines, and delays.
• The company has incurred significant losses, with net losses of $43.6 million in 2023 and $28.5 million in 2022.
• Increased risk of intellectual property litigation due to potential infringement claims by third parties.
• Addition of Phase 2 clinical trials for DNTH103 in gMG, MMN, CIDP, with FDA clearance.
• Increased emphasis on the importance of compliance with procedural, document submissions, and fee payment requirements for obtaining and maintaining patent protection.
• Proceeds from the 2024 Private Placement may not yield a significant return.
• Plan to submit CTA in the EU in Q2 2024, initiate Phase 2 trials for MMN and CIDP.
• Highlighted risks related to identifying and interpreting relevant patents, potential lapses leading to loss of patent rights, and challenges in inventorship disputes.
• Executive officers, directors, and principal stockholders beneficially own approximately 66% of outstanding shares.
• Brexit could lead to legal uncertainty and divergent regulations, affecting pricing of prescription pharmaceuticals.
• Additional capital will be required for operations, with an accumulated deficit of $402 million.
• Material weaknesses identified in internal control over financial reporting, potentially affecting financial statements' reliability.
• Failure to comply with federal securities laws could result in criminal, civil, or administrative sanctions.
• Challenges in commercializing products due to pricing regulations and reimbursement policies may harm business.
• Establishment of the European Unified Patent Court may impact patent enforcement and protection in Europe.
• Inability to manufacture product candidates on a commercial scale may hinder commercialization efforts.
• Failure to secure necessary financing could have a material adverse effect on growth strategy.
• Risks associated with identifying and interpreting relevant third-party patents, impacting product development and marketability.
• Changes in patent laws, including the Leahy-Smith America Invents Act, may impact patent prosecution.
• Changes in tax laws may accelerate taxes owed and affect business operations and results.
• Federal net operating loss carryforwards limited to 80% of taxable income after 2020.
• Reliance on WuXi Biologics for manufacturing exposes the company to supply chain issues and increased costs.
• Uncertainty in patent protection due to evolving U.S. Supreme Court rulings and proposed patent law changes.
• Concentration of ownership by executives and affiliates may hinder stockholder influence and decision-making.
• Significant new costs could arise if UK regulations on pharmaceutical pricing are altered.
• Failure to apply resources effectively could impact the ability to pursue growth strategy.
• Risks associated with export controls, sanctions, anti-corruption laws, and anti-money laundering laws.
• Equity research analysts' coverage influences stock trading; lack of coverage may affect market price.
• Added risks related to the potential impact of third-party ownership rights on in-licensed patents, leading to competition and adverse effects on competitive position.
• Uncertainty in protecting patents globally, with potential challenges in obtaining and enforcing patents in various jurisdictions.
• The company expects expenses to increase significantly for multiple Phase 2 clinical trials in 2024.
• Failure to comply with California Consumer Protection Act could lead to civil penalties.
• Non-compliance with patent maintenance requirements could result in partial or complete loss of patent rights.
• Reliance on third-party manufacturing facilities, potential negative impact if supply disrupted.
• Seeking Fast Track Designation or Orphan Drug Designation may not expedite development.
• Broad discretion in cash use and proceeds from 2024 Private Placement may not align with investor expectations.
• Potential delays in securing a replacement manufacturer for DNTH103 could impact development timelines.
• Geopolitical actions may impact patent prosecution and maintenance, potentially leading to loss of patent rights.
• Limitations on utilizing net operating loss carryforwards could increase future income tax liability.
• Seeking approval in foreign jurisdictions may subject the company to additional rules and regulations.
• Inadequate internal controls may lead to material misstatements in financial statements.
• Risks related to intellectual property infringement claims, potential litigation costs, and challenges in defending against claims.
• Changes in patent laws, including the Leahy-Smith America Invents Act, impacting patent prosecution, enforcement, and defense.
• Risks associated with manufacturing processes, including product loss and supply disruptions, could affect product quality.
• Changes in tax laws could adversely affect business, financial condition, and future taxable income.
• Potential delays in development or regulatory review processes due to Fast Track or Orphan Drug Designation.
• Federal net operating loss carryforwards limited to 80% of taxable income for years after December 31, 2020.
• Dependence on third parties for preclinical studies and clinical trials may lead to delays or terminations.
• Uncertainty in market growth estimates and revenue generation from approved products.
• Geopolitical actions affecting patent prosecution and maintenance, potentially leading to loss of patent rights.
• Failure to comply with laws or regulatory requirements may result in penalties and legal actions.
• Exposure to liability claims and product liability risks during clinical trials and commercial stages.
• Challenges in attracting appropriate collaborators may hinder the development and commercialization of product candidates.
• Establishment of the European Unified Patent Court, impacting patent infringement and revocation proceedings in the European Union.