Risk Factors Update Summary

• The SEC's new rules mandate disclosure of material cybersecurity incidents within four business days, increasing compliance costs significantly.
• The ongoing Russo-Ukraine War and Israel-Hamas conflict could materially affect our business operations. This change might result in significant financial instability.
• We are not permitted to market our Product Candidates until we receive formal approval from regulatory authorities. This could delay commercialization and significantly impact revenue generation.
• Industry consolidation may increase competition and costs, potentially harming operating results. This could lead to significant cost increases.
• New sanctions imposed by the U.S. against Russia target over 200 entities, impacting our capital access. This could restrict our funding sources significantly.
• Any actual or threatened delisting of our securities by Nasdaq could materially affect our business and financial condition. This could limit investor transactions and reduce share value.
• New cybersecurity risks from geopolitical tensions, including the Russia-Ukraine War, may require substantial investments in information security.
• Future losses are uncertain, with non-capital loss carryforwards of approximately $80 million available to offset future taxable income.
• Inflation rates in the U.S. reached a 23-year high in 2023, affecting our financial condition. This could lead to increased costs and reduced margins.
• Negative publicity may adversely affect our business, leading to litigation or investigations that distract management and increase costs. This could materially impact our financial condition and operations.
• The introduction of AI regulations may impose substantial obligations, impacting operational strategies and increasing costs.
• Uncertainty in AI intellectual property protection may hinder our competitive edge, impacting our financial condition. Failure to secure rights could allow competitors to exploit our innovations.
• Our insurance costs may increase significantly, and coverage may not be adequate to cover all possible losses. This could lead to increased financial risk and operational disruptions.
• Changes in laws, regulations, and guidelines could materially harm our business operations and financial condition. Compliance with evolving regulations may increase operational costs and complexity.