Risk Factors Update Summary

• The California Consumer Privacy Act (CCPA) has been replaced by the California Privacy Rights Act (CPRA), increasing fines up to $7,500 per intentional violation.
• Added EQ302 to preclinical development, filing three INDs, and conducting clinical development of EQ101 and EQ102.
• Increased full-time employees from 36 to 44 as of December 31, 2023.
• Several states have enacted data privacy laws, increasing compliance costs and potential liability, with fines of up to 20 million Euros or 4% of annual global revenue.
• Accumulated deficit increased from $172 million to $185 million as of December 31, 2023.
• Entered into a Purchase Agreement with Lincoln Park Capital Fund for up to $21.95 million.
• The company may face significant consequences, including government enforcement actions, litigation, and mass arbitration demands, for failing to comply with data privacy and security laws.
• Cash, cash equivalents, and short-term investments decreased from $71 million to $40 million as of December 31, 2023.
• Added a one-time payment of JPY 5.0 billion (approximately $33 million) if Ono exercises its exclusive option.
• The company's ability to utilize its U.S. federal Net Operating Losses (NOLs) may be impacted by ownership changes, potentially affecting future tax liabilities.
• Repurchased 298,385 shares of common stock for approximately $0.3 million as of December 31, 2023.
• The Affordable Care Act has substantially changed healthcare financing, impacting the U.S. pharmaceutical industry, with increased Medicaid rebates and new fees for pharmaceutical manufacturers.
• The company may face adverse consequences if third-party processors fail to comply with data privacy and security laws, including government enforcement actions, litigation, and imprisonment of company officials.
• The company's ability to access cash and liquidity resources could be significantly impaired by factors affecting financial institutions, potentially impacting financing and operations.