Risk Factors Update Summary

• Obtaining coverage and reimbursement approval from third-party payors is costly and time-consuming, impacting profitability.
• Recent federal budget proposals may impose price controls, adversely affecting our ability to obtain adequate prices for our product candidates. This could significantly impact revenue.
• The lengthy FDA approval process may take many years, impacting our ability to market products. This unpredictability could delay revenue generation significantly.
• The amount of our future losses is uncertain, potentially causing significant fluctuations in stock price.
• Foreign sales of our product candidates could be adversely affected by governmental controls and trade restrictions.
• Our net losses totaled $29.4 million and $59.2 million for the years ended March 31, 2024 and 2023, respectively. Continued losses may affect stockholder equity.
• The company may face increased costs and delays if third-party manufacturers cannot optimize production yields. This could significantly impact commercialization timelines and profitability.
• We have not submitted an NDA to the FDA or similar submissions to foreign authorities for any product candidate. This lack of submissions may hinder future development.
• The Inflation Reduction Act allows Medicare to negotiate prices for high-cost drugs, affecting revenue.
• The current political environment in the U.S. could diminish the perceived value of pharmaceutical companies, impacting our share price.
• We may be required to suspend marketing of a product, or we may decide to remove such product from the marketplace. This change might result in significant revenue loss.
• The COVID-19 pandemic has adversely affected our operations, potentially delaying clinical trials and increasing costs. This could materially impact our business and financial results.
• We expect to continue incurring significant losses for the foreseeable future, which could hinder our ability to raise capital and expand operations.
• Legislative changes may impose stricter coverage criteria and downward pressure on prices for approved products.
• Our reliance on third-party manufacturers may lead to delays in clinical trials if they fail to meet regulatory requirements.
• We could incur significant costs associated with environmental, health, and safety laws and regulations, potentially leading to fines and penalties.
• We have concentrated our research and development efforts on psychiatric and neurological disorders, facing challenges in drug development. This could delay product candidate approvals.
• We had U.S. federal net operating loss carryforwards totaling $208.0 million as of March 31, 2024.
• Increased tariffs could disrupt existing supply chains and impose additional costs on the business. This uncertainty may lead to higher operational expenses.
• We may face product liability lawsuits that could divert resources and limit commercialization of our product candidates. This risk could lead to substantial financial liabilities.
• As of March 31, 2024, we had 38 full-time employees, impacting our operational capabilities and growth potential.
• Changes in tax laws could adversely affect our business and financial condition, impacting net operating losses.
• We currently have no products approved for commercial sale and have generated no revenue from product sales to date, impacting our financial viability.
• Cyberattacks or failures in our IT systems could disrupt operations and result in data breaches. This could expose us to regulatory investigations and significant liabilities.
• If our clinical trials fail to replicate earlier positive results, it could jeopardize our ability to obtain regulatory approval. This risk could significantly harm our business prospects.
• Our future product revenue may be lower than if we directly marketed or sold our product candidates, if approved. This could significantly impact our financial projections.
• The EU GDPR imposes fines of up to €20 million or 4% of annual global revenue for noncompliance.
• The FDA may require a Risk Evaluation and Mitigation Strategy (REMS) for approved products, which could entail costly post-marketing studies and long-term patient follow-up.
• The cumulative effects of various factors could result in large fluctuations in our quarterly and annual operating results.
• The company may need to maintain licenses for active pharmaceutical ingredients (APIs) from third parties, potentially increasing development costs and delaying commercialization.
• Changes in manufacturing methods during development may lead to additional costs or delays. Such changes could prevent timely regulatory approval and commercialization of our product candidates.
• We may need to prioritize development of certain product candidates over others due to limited resources, potentially affecting our market opportunities.
• Increased scrutiny over drug pricing practices may lead to significant changes in reimbursement methodologies and policies.
• The company is subject to extensive healthcare laws and regulations, which could lead to significant penalties if compliance is not maintained, impacting financial stability.
• Our ability to utilize historical net operating losses may be limited by ownership changes under Sections 382 and 383 of the Code.