Risk Factors Update Summary

• Net losses increased significantly from $29.8 million in 2022 to $71.9 million in 2023.
• Change from "Sarbanes - Oxley Act of 2002" to "Sarbanes-Oxley Act of 2002" enhances compliance.
• Imposition of CPRA imposes new data protection obligations and audit requirements. This change might result in increased compliance costs.
• Accumulated deficit rose from $124.8 million to $187.7 million as of December 31, 2022 and 2023.
• Concerns about disruptions at regulatory agencies hindering approvals and commercialization efforts.
• Management is now required to report on internal control effectiveness starting this fiscal year.
• Increase in NOL carryforwards from $25 million to $35 million for federal income tax purposes. This change may positively impact tax liabilities.
• Increased emphasis on the need for substantial funding for product development and commercialization.
• Risks associated with adverse side effects potentially delaying regulatory approval and clinical trials.
• Failure to comply may lead to sanctions, investigations, and the need for additional resources.
• The CPRA created a new California data protection agency. This change could lead to stricter data protection enforcement.
• Mention of geopolitical conflicts impacting operations and financial condition.
• Patent term extension may be limited to one patent covering approved drugs. This change could impact post-approval market exclusivity.
• Dependency on Mitsubishi Tanabe for intellectual property rights highlighted.
• Potential impact of inflation on costs due to global supply chain disruptions. This change may affect profitability and operational expenses.