10-Q

美国

证券交易委员会

华盛顿特区 20549

表格 10-Q

(标记一个)


☒	根据1934年证券交易法第13或15(d)条款的季度报告。

截至2024年6月30日季度结束 9月30日， 2024

或


☐	根据1934年证券交易法第13或15(d)条款的过渡报告

过渡期从_____到_____

委员会档案编号： 001-41331

AN2 Therapeutics, Inc.

（根据其章程所指定的正式名称）


特拉华州	82-0606654
（国家或其他管辖区的公司成立或组织）	（IRS雇主唯一识别号码）
1800 El Camino Real, Suite D Menlo Park, 加利福尼亚	94027
(主要行政办公室地址)	(邮政编码)

公司电话号码，包括区号：（650) 331-9090

在法案第12(b)条的规定下注册的证券：

    每个类别的标题

    交易
符号:

    在其上注册的交易所的名称

    普通股

    ANTX

    纳斯达克全球精选市场

请在以下复选框中打勾，指示注册人：(1)在前12个月(或注册人被要求提交这些报告的更短期间内)已经提交了1934年证券交易法第13或15(d)条规定需要提交的所有报告；以及(2)在过去的90天内一直受到了此类文件提交要求的限制。是☒ 否 ☐

请在以下复选框中打勾，指示注册人是否已经电子提交了根据Regulation S-T规则405条(本章节的§232.405条)需要提交的所有互动数据文件在过去的12个月内(或注册人被要求提交这些文件的更短期间内)。是☒ 不是 ☐

请勾选标记以说明注册人是大型快速申报人、加速申报人、非加速申报人、较小的报告公司还是新兴成长型公司。请查看《交易所法》第120亿.2条中“大型快速申报人”、“加速申报人”、“较小的报告公司”和“新兴成长型公司”的定义。


大型加速报告人	☐	加速文件提交人	☐
非加速文件提交人	☒	较小的报告公司	☒
新兴成长公司	☒

如果是新兴成长型企业，请勾选复选标记，表明注册者已选择不使用延长过渡期来符合根据证券交易法第13(a)条规定提供的任何新财务会计准则。 ☐

请在以下空格内打勾，表示注册人是不是外壳公司（按交易所法则120亿.2条定义）。是 ☐ 否 ☒

截至2024年11月6日，登记人持有 29,878,890股流通在外。


		页面

关于前瞻性陈述的特别说明		1

第一部分	财务信息	3

第 1 项。	财务报表（未经审计）	3
	简明资产负债表	3
	简明的运营报表和综合亏损	4
	股东权益简明表	5
	简明的现金流量表	7
	未经审计的简明财务报表附注	8
第 2 项。	管理层对财务状况和经营业绩的讨论和分析	25
第 3 项。	关于市场风险的定量和定性披露	35
第 4 项。	控制和程序	36

第二部分。	其他信息	38

第 1 项。	法律诉讼	38
第 1A 项。	风险因素	38
第 2 项。	未注册的股权证券销售和所得款项的使用	90
第 3 项。	优先证券违约	90
第 4 项。	矿山安全披露	90
第 5 项。	其他信息	91
第 6 项。	展品	92
签名		94

特别关于前瞻性声明的注意事项关于前瞻性声明

这根据第10-Q表格的季度报告（“10-Q表格”），包含前瞻性陈述。除了本10-Q表格中包含的历史事实陈述之外，所有其他陈述，包括关于我们未来经营结果、财务状况、业务策略、产品候选药物、计划进行的前期和非临床研究和临床试验、前期和非临床研究、临床试验成果、研发成本、监管批准、成功的时间和可能性、以及管理层对未来经营目标和计划，都属于前瞻性陈述。这些陈述涉及一些已知和未知的风险、不确定性和其他重要因素，有些情况下超出我们的控制，可能导致我们的实际结果、业绩或成就与前瞻性陈述所表达或暗示的任何未来结果、业绩或成就明显不同。

在某些情况下，您可以通过"可能"，"将"，"应该"，"会"，"期望"，"计划"，"预期"，"可能"，"打算"，"目标"，"项目"，"相信"，"估计"，"预测"，"潜在"，"继续"等词语或这些词语的否定形式或其他类似表达来识别前瞻性陈述。本文中包含的前瞻性陈述第10-Q表格中包括但不限于以下关于的声明：

▪

我们在临床前和非临床研究及临床试验的启动、时间安排、进展和结果，以及我们的研发项目，包括临床试验材料和药品上市的制造；

▪

我们现有的现金充足以支付未来的营业费用和资本支出要求；

▪

我们关于费用、资本需求和额外融资需求的估计的准确性;

▪

我们利用融资活动所得款项；

▪

将我们的临床前结果和数据以及早期临床试验结果，特别是与安全性、有效性和持久性有关的结果，翻译成未来的临床试验结果；

▪

我们有能力留住关键专业人员的持续服务，并确定、聘用和留住其他合格的专业人员；

▪

我们推进初始产品候选者及我们可能开发的其他产品候选者进入临床试验的能力，并成功完成临床试验；

▪

我们初步产品候选者以及其他可能开发的产品候选者的获得和保持监管批准的时间安排和能力；

▪

我们最初的产品候选者及我们可能开发的任何其他产品候选者的商业化，如果获得批准；

▪

我们业务模式的实施、我们业务的战略计划，以及我们最初的候选产品和我们可能开发的任何其他产品候选者；

▪

我们有能力确定更多的产品候选并推动它们进入临床开发阶段；

▪

我们的财务业绩；

▪

与我们的竞争对手和我们所在的行业有关的发展；

▪

关于我们将符合2012年“创业公司启动法案”（“JOBS法案”）下的新兴成长公司资格期间的期望。

我们主要基于当前对我们的业务、我们所处行业的期望和预测，以及我们认为可能影响我们的业务、财务控件、运营结果和前景的财务趋势，来制定这些前瞻性陈述。这些前瞻性陈述并不保证未来的表现或发展。这些前瞻性陈述仅代表本表格10-Q日期时的情况，并受到“风险因素”部分及本表格10-Q其他地方描述的多种风险、不确定性和假设的影响。由于前瞻性陈述本质上受到风险和不确定性的影响，其中一些是无法预测或量化的，因此您不应将这些前瞻性陈述视为对未来事件的预测。我们的前瞻性陈述中反映的事件和情况可能无法实现或发生，实际结果可能与前瞻性陈述中预计的结果存在重大差异。除非法律要求，我们不计划公开更新或修订本声明中的任何前瞻性陈述，无论是基于任何新信息、未来事件，或其他原因。

此外，“我们相信”等表态反映了我们对相关主题的信念和观点。这些表态基于我们在本10-Q表格日期之时可以获取到的信息，尽管我们认为这些信息构成了这些表态的合理依据，但这些信息可能是有限或不完整的，我们的表态不应被视为我们对所有可能获得的相关信息进行了全面调查或审查。这些表态本质上是不确定的，因此请注意不要过分依赖这些表态。

第一部分——财务信息ANCIAL 信息

项目1 控件1. 基本报表。

AN2治疗公司

精简资产负债表

(以千为单位，除每股数量和每股金额外)

(未经审计)


	九月三十日，			12月31日，
	2024			2023
资产
流动资产：
现金及现金等价物	$	33,504		$	15,647
短期投资		59,922			91,648
预付费用和其他流动资产		4,263			3,212
总流动资产		97,689			110,507
所有基金类型投资		—			27,194
其他资产，长期		—			1,043
资产总额	$	97,689		$	138,744
负债和股东权益
流动负债:
应付账款	$	1,711		$	2,676
应计薪酬		2,110			4,018
应计负债		4,921			6,681
其他流动负债		1,275			668
流动负债合计		10,017			14,043
总负债		10,017			14,043
承诺和 contingencies（注 7）
股东权益:
优先股，$0.00010.00001 面值； 10,000,000截至2024年9月30日和2023年12月31日，分别授权开多股份； no2024年9月30日和2023年12月31日已发行和流通的股份数。		—			—
普通股，每股面值为 $0.0001；0.00001面值； 500,000,0002024年9月30日和2023年12月31日授权的股份； 29,868,583和 29,741,445分别于2024年9月30日和2023年12月31日发布并流通		—			—
其他资本公积		285,814			278,881
累计其他综合收益		112			275
累积赤字		(198,254	)		(154,455	)
股东权益总额		87,672			124,701
负债和股东权益总额	$	97,689		$	138,744

附注是这些未经审计的中期未经审计的基本财务报表的组成部分。

AN2治疗公司

简化财务报表经营业绩和综合亏损

(以千为单位，除每股数量和每股金额外)

(未经审计)


	截至9月30日的三个月						截至9月30日的九个月
	2024			2023			2024			2023
运营费用：
研究和开发	$	8,287		$	14,429		$	35,091		$	39,952
一般和行政		3,484			3,751			10,856			10,868
重组费用		2,243			—			2,243			—
运营费用总额		14,014			18,180			48,190			50,820
运营损失		(14,014	)		(18,180	)		(48,190	)		(50,820	)
其他收入，净额		1,267			1,473			4,391			2,986
归属于普通股股东的净亏损	$	(12,747	)	$	(16,707	)	$	(43,799	)	$	(47,834	)
归属于普通股股东的每股净亏损，基本亏损和摊薄后	$	(0.43	)	$	(0.65	)	$	(1.47	)	$	(2.22	)
用于计算基本和摊薄后每股净亏损的加权平均股数		29,841,169			25,645,421			29,809,839			21,532,537
其他综合损失：
未实现的投资收益（亏损）		139			(3	)		(163	)		252
综合亏损	$	(12,608	)	$	(16,710	)	$	(43,962	)	$	(47,582	)

附注是这些未经审计的中期未经审计的基本财务报表的组成部分。

AN2 THERAPEUTICS, INC.

股东权益的概括报表

（以千为单位，股数除外）

(未经审计)


	普通股				额外的实收资本		累计其他综合			累计			总计股东权益
	股份		金额		资本		收益（损失）			亏损			股权
2023年12月31日的余额。		29,741,445	$	—	$	278,881	$	275		$	(154,455	)	$	124,701
GAAP gross margin		45,288		—		124		—			—			124
股票期权行使时发行普通股		28,930		—		225		—			—			225
对早期行使的股票期权的归属权		—		—		1		—			—			1
基于股票的补偿		—		—		2,385		—			—			2,385
可供出售投资的未实现损失		—		—		—		(222	)		—			(222	)
净亏损		—		—		—		—			(16,617	)		(16,617	)
2024年3月31日的结余		29,815,663		—		281,616		53			(171,072	)		110,597
对早期行使的股票期权的归属权		—		—		1		—			—			1
限制性股票单位解除后发行普通股		13,377		—		—		—			—			—
基于股票的补偿		—		—		2,271		—			—			2,271
可供出售投资的未实现损失		—		—		—		(80	)		—			(80	)
净亏损		—		—		—		—			(14,435	)		(14,435	)
2024年6月30日的余额		29,829,040		—		283,888		(27	)		(185,507	)		98,354
GAAP gross margin		25,412		—		23		—			—			23
对早期行使的股票期权的归属权		—		—		1		—			—			1
限制性股票单位解除后发行普通股		14,131		—		—		—			—			—
基于股票的补偿		—		—		1,902		—			—			1,902
可供出售金融资产未实现收益		—		—		—		139			—			139
净亏损		—		—		—		—			(12,747	)		(12,747	)
2024年9月30日的余额		29,868,583	$	—	$	285,814	$	112		$	(198,254	)	$	87,672


	普通股				额外的实收资本		累计其他综合			累计			总计股东权益
	股份		金额		资本		收益（损失）			亏损			股权
2022年12月31日的余额		19,402,658	$	—	$	185,469	$	(374	)	$	(89,723	)	$	95,372
GAAP gross margin		23,794		—		199		—			—			199
对早期行使的股票期权的归属权		—		—		2		—			—			2
基于股票的补偿		—		—		2,068		—			—			2,068
可供出售金融资产未实现收益		—		—		—		199			—			199
净亏损		—		—		—		—			(15,323	)		(15,323	)
2023年3月31日的余额		19,426,452		—		187,738		(175	)		(105,046	)		82,517
在“按市场”发行普通股中，减去佣金和发行成本$0.9百万		2,502,000		—		19,050		—			—			19,050
对早期行使的股票期权的归属权		—		—		2		—			—			2
基于股票的补偿		—		—		1,943		—			—			1,943
可供出售金融资产未实现收益		—		—		—		56			—			56
净亏损		—		—		—		—			(15,804	)		(15,804	)
2023年6月30日的余额		21,928,452		—		208,733		(119	)		(120,850	)		87,764
在承销提供中发行普通股，减去承销商佣金和发行成本，为$4.5百万		7,777,778		—		65,479		—			—			65,479
GAAP gross margin		20,215		—		167		—			—			167
股票期权行使时发行普通股		15,000		—		99		—			—			99
对早期行使的股票期权的归属权		—		—		1		—			—			1
基于股票的补偿		—		—		2,169		—			—			2,169
可供出售金融资产的未实现损失		—		—		—		(3	)		—			(3	)
净亏损		—		—		—		—			(16,707	)		(16,707	)
2023年9月30日的余额		29,741,445	$	—	$	276,648	$	(122	)	$	(137,557	)	$	138,969

附注是这些未经审计的中期未经审计的基本财务报表的组成部分。

AN2治疗公司

精简现金流量表

(以千为单位)

(未经审计)


	截至九个月 9月30日,
	2024			2023
经营活动中使用的现金流量
净亏损	$	(43,799	)	$	(47,834	)
调整为净损失到经营活动现金流量净使用：
基于股票的薪酬费用		6,558			6,180
非现金租赁费用		—			53
投资折扣净增值		(2,712	)		(1,549	)
运营资产和负债的变化：
预付款和其他资产		(8	)		(405	)
应付账款		(965	)		2,660
应计薪酬		(1,908	)		28
应计负债		(1,760	)		3,727
营运租赁负债		—			(53	)
其他流动负债		610			973
用于经营活动的净现金		(43,984	)		(36,220	)
投资活动现金流量
投资购买		(22,371	)		(112,348	)
投资到期日		83,840			68,650
投资活动产生的净现金流量		61,469			(43,698	)
筹资活动现金流量
从承销发行普通股所得收益，扣除佣金和发行费用		—			65,800
从“市场发行”普通股所得收益，扣除佣金和发行费用		—			19,050
根据员工股票购买计划发行普通股所得款项		147			366
行使股票期权所得		225			99
融资活动提供的净现金		372			85,315
现金及现金等价物净增加额		17,857			5,397
期初现金及现金等价物余额		15,647			27,219
期末现金及现金等价物	$	33,504		$	32,616
非现金融资项目的补充披露
应付账款和应计负债中包含的递延发行成本	$	—		$	321

附注是这些未经审计的中期未经审计的基本财务报表的组成部分。

AN2 Therapeutics，Inc。

No适用于未经审计的简明基本报表

附注1. 公司业务组织和描述

业务描述

AN2 Therapeutics, Inc.（以下简称“公司”）是一家专注于发现和开发源自其硼化学平台的新型小分子药物的生物制药公司。AN2拥有一系列正在研发中的基于硼的化合物，用于治疗光翼病、非结核分枝杆菌（NTM）和白马鼻疽病，同时还有早期项目专注于传染病和肿瘤学领域的靶向。该公司于2017年2月在特拉华州注册成立，于2019年11月开始运营，在2022年3月25日开始在纳斯达克全球精选市场以“ANTX”为标的进行交易，总部位于加利福尼亚州门洛帕克。

自2019年11月开始运营以来，公司已将几乎所有资源用于进行研究和开发活动，包括针对其首个产品候选药物epetraborole以及其他产品候选药物的研究，业务规划和重组，招聘人员，筹集资金，并为这些运营提供总体和行政支持。

首次公开募股

于2022年3月24日，公司向美国证券交易委员会提交的S-1表格（文件编号333-263295）登记声明，关于其首次公开发行普通股（“IPO”）的注册声明生效。首次公开发行于2022年3月29日结束，公司发行了 4,600,000 股份，以每股向公众的价格为$15.00 每股。此外，在IPO结束前，公司所有尚未赎回的可转换优先股自动转换为 11,409,488 普通股。IPO出售股票的总交易额为$69.0 百万美元。扣除承销折扣和佣金$4.8 百万美元，以及公司支付或应支付的发行费用$3.3 百万美元，本次发行的净收益约为$60.9 百万美元。

2022年4月8日，IPO的承销商行使了购买公司普通股的额外选择权，公开发行价为每股$ 690,000 15.00 每股，从中公司额外获得的总收入为$10.4 百万美元，额外的净收入约为$9.5 百万美元。经过行使超额配售选择权，公司在首次公开发行中出售的股票总数增加至 5,290,000 股，公司的总净收入约为$70.4 百万美元。

市场开盘时的发行

2023年4月6日，公司与Cowen and Company, LLC签订了一项销售协议（“销售协议”），Cowen and Company, LLC作为公司的销售代理（“代理人”）发行和销售的总毛销售额为$100.0 百万股股份（“股票”）通过“市场”股权发行计划（“ATM发行”）。公司将向代理支付高达%销售协议项下出售股票所得金额的佣金，并向代理补偿某些费用。截至2023年12月31日止的一年内，公司发行并销售了 3.0%的普通股 2,502,000 通过ATM发行，获得净收益为$百万，扣除佣金和其他发行费用后。公司没有在19.1 年通过ATM发行出售任何普通股没有。财务报表中的货币翻译调整

包销发行—James Trust有权要求在2025年2月7日之前的任何日期进行一次完全市场营销的包销发行。

2023年8月15日，公司与Cowen and Company、Leerink Partners LLC和evercore Group L.L.C.签订了承销协议（“承销协议”），作为若干承销商的代表，发行并卖出 7,777,778 普通股的发行价格为每股9.00 每股，扣除佣金和其他发行成本后净收益为$65.5 百万美元，（“承销发行”） ).

注2. 报告基础和重要会计政策摘要

呈现基础

公司的基本报表已按照美国通用会计准则（"U.S. GAAP"）编制。

未经审计的中期简明财务信息

附注列出的截至2024年9月30日的简明资产负债表，截至2024年9月30日止三个和九个月的简明综合损益表和简明股东权益表，以及截至2024年9月30日和2023年止九个月的简明现金流量表均为未经审计。未经审计的中期简明财务报表是根据经审计的年度财务报表的相同依据编制的，并且在管理层意见中，反映了按2024年9月30日公司资产负债状况、三个和九个月截至2024年9月30日和2023年的业务结果以及截至2024年9月30日和2023年的现金流量等所需的所有调整，其中仅包括正常重复调整。有关截至2024年9月30日及2023年的三和九个月的财务数据和其他信息也是未经审计的。截至2024年9月30日的三和九个月的结果不一定反映可预期的2024年12月31日，任何其他中间期间或将来年度或时间段的结果。这里包括的2023年12月31日资产负债表来源于该日期的审计财务报表。部分披露从中期简明财务报表中精简或省略。因此，应阅读这些未经审计的中期简明财务报表与公司截至2023年12月31日的以及包括在公司年度报告10-K中的截至2023年12月31日的审计财务报表共同阅读。如在2024年3月29日提交给美国证券交易委员会（“SEC”）的文件中所述。

风险和不确定性

流动性

在首次公开募股之前，公司的业务历来是通过发行可赎回可转换优先股来融资的。自成立以来，公司已经遭受了重大损失，并且经营活动产生了负净现金流。截至2024年9月30日和2023年9月30日的九个月，公司分别录得净亏损$43.8 百万美元和美元47.8 百万美元，并且经营活动中使用现金流量各为 $44.0 百万美元和 $36.2 百万美元。公司累积递减赤字达到$198.3 百万美元和美元154.5 截至2024年9月30日和2023年12月，公司录得数额均为百万美元，并将需要大量额外资金用于研发活动。公司预计在其产品候选品目前正在研发期间，将继续录得额外亏损，直至能够实现有效销售。

截至2024年9月30日，公司现金、现金等价物和投资额为$93.4 公司管理层认为，截至2024年9月30日，其现金、现金等价物和投资额为数百万美元。至少足以资助当前至2024年9月30日这些缩表财务报表发布之日的经营计划。未来资本需求将取决于诸多因素，包括研发支出的时间和幅度，包括临床前和非临床研究、临床试验、以及临床试验和材料制造的成本。如果公司需要额外融资，无法保证会有符合公司要求的融资，要么根本没有融资可得。如果无法通过经营活动产生充裕现金流，筹集额外资金，并降低自由支出，那么如果额外资金不可得的话，可能会对公司实现其预期业务目标产生重大不利影响。

分部

公司作为业务运营和管理其业务。一份报告和运营部门的运营部门。公司的首席执行官，也是首席运营决策者，审查公司范围内的财务信息，以便分配资源和评估财务表现。

使用估计

按照美国通用会计准则编制财务报表要求管理层进行影响资产和负债的报告金额和披露截至财务报表日期的附属资产和负债金额，以及报告期间费用金额的估计和判断。管理层定期评估其估计，包括涉及研发应计费用、资产和负债的公允价值以及以股票为基础的补偿。管理层根据历史经验和管理层认为在情况下合理的各种其他市场特定和相关假设来确定其估计。实际结果可能不同于这些估计。

研发费用

所有研发支出，包括由第三方执行的工作，在发生时被列为费用。研发成本包括薪水和其他与人员相关的费用，包括相关的以股票为基础的补偿、咨询费用和设施成本，以及支付给代表公司进行某些研发活动的其他实体的费用。在收到用于研发的货物或服务之前支付的款项被资本化，直到收到货物或服务。

作为准备财务报表过程的一部分，公司估计其应计费用。该过程涉及审查报价和合同，确定已代表公司执行的服务，估计已执行的服务水平以及为尚未向公司开具发票或以其他方式通知实际成本的服务所发生的成本。公司的大多数服务提供商按月延迟发票服务，或在达到合同里程碑时发票。公司根据每个报告期末公司已知事实和情况，对其应计费用进行估计。公司应计研发费用中的重要估计与与合同制造、临床和其他研究机构、学术研究中心以及其他供应商发生的费用有关，这些费用是与公司尚未结算的研究和开发活动相关的。

按股票补偿计算的费用

公司根据授予日期估计的每个奖项的公平价值，衡量和确认向员工、董事和非员工授予的股权分类股权奖励的补偿费用。员工和董事奖励的补偿费用根据整个奖项的服务期间（通常是整个奖项的获 vesting 期间）以直线方式确认。赔偿费用将随着放弃的发生进行调整。非员工奖励的补偿费用的确认与公司如果用现金支付所购买的商品或提供的服务的方式和期间相同。

用于计算按股票为基础的补偿费用的股票期权的公允价值的评估模型是 Black-Scholes 期权定价模型（Black-Scholes 模型）。Black-Scholes 模型要求管理层对计算中使用的变量做出假设和判断，包括预期期限、普通股的预期波动率、假定的无风险利率以及公司可能支付的预期分红。管理层使用预期期限的简化计算（基于获 vesting 日期和合同期限结束之间的中点）作为其股票期权的预期期限，因为公司已经得出结论，其股票期权历史不提供合理的基础来估计预期期限。波动率基于具有相同特征的实体普通股的历史波动率的平均值。风险类似公司。无风险利率基于授予期内与期权预期寿命对应的美国国债收益率曲线。公司使用假定的分红派息率零因为公司从未支付过分红，并且目前没有任何支付普通股股息的计划。

对于包含绩效条件的期权奖励，在绩效条件可能得到满足的时期内确认薪酬成本。用于期权意识如果归因于流动性事件或控制权变更，则在事件发生之前，不太可能达到业绩条件。因此，在实现基于绩效的归属条件之前，不会确认任何薪酬支出。

现金和现金等价物

公司将购买时到期日为三个月或更短的所有高流动性投资视为现金等价物。由货币市场基金组成的现金等价物按公允价值列报。截至2024年9月30日和2023年12月31日，该公司的现金及现金等价物为美元33.5 百万和美元15.6 分别为百万。

投资

投资包括美国国债、商业票据、美国政府机构证券、资产支持证券和公司债务证券。公司的所有投资均被归类为可供出售，按估计公允价值记账，并以现金等价物、短期投资或长期投资形式报告。管理层在收购投资时确定投资的适当分类，并在每个资产负债表日评估此类分类的适当性。合同到期日超过12个月的投资被视为长期投资。出售投资的成本（如果有）基于特定的识别方法。

可供出售投资的未实现收益和亏损作为股东权益（赤字）的单独组成部分在累计的其他综合（亏损）收益中列报。对于处于未实现亏损状况的可供出售债务证券，公司首先评估其是否打算出售，或者更有可能需要在收回摊销成本基础之前出售该证券。如果满足有关出售意向或要求的任一标准，则证券的摊销成本基础将减记为公允价值，并在运营报表和综合亏损报表中的其他收益（支出）中确认。如果两个标准都不满足，公司将评估公允价值的下降是否与信贷相关因素或其他因素有关。在进行评估时，管理层会考虑公允价值在多大程度上低于摊销成本、评级机构对证券评级的任何变化以及与证券特别相关的不利条件等因素。与信贷相关的减值损失受公允价值小于摊销成本基础的金额的限制，通过其他收入净额的信贷损失备抵进行记录。由于非信贷因素导致的公允价值下降低于摊销成本基础而造成的任何未实现亏损与未实现收益一起作为股东权益的单独组成部分在累计其他综合收益（亏损）中确认。可供出售证券的已实现收益和亏损以及公允价值的下降（如果有）包含在经营报表和综合亏损表中净额的其他收益中。

为了识别和衡量与信贷相关的减值，公司的政策是将适用的应计利息排除在相关证券的公允价值和摊销成本基础上。公司选择及时注销无法收回的应计应收利息余额，公司的定义为拖欠90天的到期利息。应计利息注销将通过冲销利息收入来记录。应计应收利息记入公司未经审计的中期简明资产负债表上的预付费用和其他流动资产。

截至2024年9月30日和2023年12月31日，该公司的投资额为美元59.9 百万和美元118.8 分别为百万。

信用风险的集中度

可能使公司面临信用风险集中的金融工具包括现金、现金等价物和投资。该公司的现金通过美国的金融机构进行投资。该公司的投资包括由高评级公司实体或美国政府发行的债务证券和资产支持证券。公司对任何个体公司实体的风险敞口均受其投资政策的限制。存款已经并将继续超过联邦保险限额。该公司将其现金等价物投资于高评级货币市场基金。公司在此类账户中没有出现任何信贷损失。

如果持有现金的金融机构违约，公司将面临信用风险，金融（简称 “资产负债表”）。2023年3月，加州金融保护与创新部关闭了该公司使用的一家金融机构，该部指定联邦存款保险公司为接管人。直到 2024 年 9 月 30 日，该公司没有资产负债表外的信用风险集中。

政府合同

2022年9月，公司获得了费用报销合同授予，根据该合同，公司有资格获得高达美元17.8 百万美元来自美国国家过敏和传染病研究所（“NIAID”），用于支持临床前、1期研究和其他活动，使依培拉洛进入急性全身性类鼻炎和其他生物威胁病原体的后期开发阶段。根据合同编号 75N93022C00059，该项目将全部或部分由NIAID、国立卫生研究院、卫生与公共服务部提供的联邦资金提供资金。该合同的会计不属于ASC 606 “与客户签订合同的收入” 的范围，因为NIAID不会直接受益于epetraborole的进展。由于根据美国公认会计原则，没有关于政府对营利性商业实体援助的会计核算的权威指导，因此公司在核算NIAID向公司支付的合同款项时类推适用了国际会计准则（IAS）20，即政府补助金会计和政府援助披露。根据国际会计准则第20号，只要有合理的保证合同条件得到满足，合同资金将得到承认，政府合同收益就会得到确认。对于NIAID合同，这是在发生与合同相关的合格费用或公司得出合同条件已基本满足的结论之后发生的。然后，与运营费用报销相关的收入作为这些开支的减少额入账（见附注4——资金安排）。

拨款协议

2022年9月，公司与佐治亚大学研究基金会（“UGARF”）签订了分包协议，最多可获得美元1.4 来自UGARF的百万美元，用于支持治疗恰加斯病的含硼小分子的临床前开发。

2023年9月，公司与比尔和梅琳达·盖茨基金会（“BMGF”）签订了赠款协议，以提供高达 $ 的资金1.8 百万用于生产新的硼基铅化合物，有可能开发成治疗结核病（“TB”）和疟疾的药物。

2024年7月，公司修订了与UGARF签订的2022年分包合同协议，要求提供金额为美元的额外资金0.2 百万。

2024年9月，公司与BMGF签订了第二年的延续拨款协议，以提供高达$的资金2.0 百万美元用于支持一项早期研究计划，该项目侧重于提供新的线索，以此作为新药的起点，这些新药可以组合起来提供更短、更安全、更简单的结核病药物治疗方案。

公司根据ASC 958-605，不以营利为目的实体 - 收入确认，在符合资格的成本发生且满足赠款协议条件时确认赠款收入。当赠款收入的收取合理确定时，公司将其所发生的研发费用减少，并记录相应的应收赠款。现金在发生符合条件的成本之前从赠款中收到时，记录为负债，并作为减少所发生的符合条件的研发费用进行确认（见注释4—资金安排）。

综合损失

综合损失包括净损失和排除在净损失之外的某些股东权益变动。公司的其他综合损失由可供出售投资的未实现损益的净变动组成。在截至2024年和2023年9月30日的九个月中，公司的未实现净损失为$0.2 百万，0.3 $百万的未实现净收益，

每股净亏损

归属于普通股股东的基本净损失每股是通过将归属于普通股股东的净损失除以期间内流通的普通股加权平均数计算得出的，不考虑潜在的稀释性证券。归属于普通股股东的稀释净损失每股是通过将归属于普通股股东的净损失除以期间内流通的普通股和潜在稀释性证券的加权平均数来计算的。根据稀释净损失每股的计算，股票期权、未归属的限制性股票单位（RSUs）和与未归属的股票期权相关的可回购普通股被视为潜在的稀释性证券。每股归属于普通股股东的基本和稀释净损失是按照参与证券所要求的两类方法进行呈现的。公司还将早期行使的股票期权所发行的可回购股票视为参与证券，因为这些股票的持有者在普通股支付股息时拥有不失权的股息权利。早期行使并受可回购条款限制的股票持有者没有合同义务在公司的损失中分享。因此，净损失完全归属于普通股股东。由于公司在所有报告期间均报告了净损失，稀释净损失每股与这些期间的基本净损失每股相同，因为潜在稀释性证券的影响将是反稀释的。

重组费用

重组费用主要包括员工遣散费和其他与终止员工相关的费用，部分被与某些被终止员工签署的咨询协议相关的股票薪酬费用的减少所抵消。公司依据终止福利是基于持续福利安排还是一次性福利安排来记录重组费用。公司按照ASC 712《非退休后就业福利》对已经记录的持续福利安排进行会计处理，例如那些由雇佣协议或预先存在的遣散政策所记录的安排。根据ASC 712，后就业福利的负债在义务可能发生且可以合理估计的情况下记录。公司按照ASC 420《退出或处置成本义务》对一次性就业福利安排进行会计处理。

JOBS法案会计选举

本公司是根据2012年《启动我们业务启动法案》（“JOBS 法案”）定义的新兴成长公司。根据JOBS 法案，新兴成长公司可以推迟采用JOBS 法案颁布后发布的新的或修订的会计标准，直到这些标准适用于私营公司。本公司已选择利用此扩展过渡期，以遵守对上市公司和私营公司有效日期不同的新或修订会计标准，直到以下两者中发生较早的时间：（i）本公司不再是新兴成长公司，或（ii）积极且不可撤销地选择退出《JOBS 法案》提供的扩展过渡期。本公司可以利用这些条款最多五年（即到2027年3月），除非本公司在更早的日期停止成为新兴成长公司。因此，这些基本报表可能与按上市公司有效日期遵守新或修订会计公告的公司不具可比性。

最近未采纳的会计声明

不时地，财务会计标准委员会（“FASB”）或其他标准制定机构发布新的会计公告，并在指定的生效日期由本公司采纳。除非另有说明，本公司相信，近期发布的尚未生效的标准不会对其简明基本报表和披露产生重大影响。作为一家“新兴成长”公司，本公司计划利用某些来自各种报告要求的临时豁免，并利用额外的过渡救济。

在2023年11月，FASB发布了ASU 2023-07，部门报告（主题280）：可报告部门披露的改进（“ASU 2023-07”）。ASU 2023-07中的修订旨在改善可报告部门的披露，主要通过增强对重大部门费用的披露。ASU 2023-07适用于2023年12月15日之后开始的年度期间，以及2024年12月15日之后开始的中期期间。本ASU中的修订应追溯适用于财务报表中呈现的所有以前期间。允许提前采用。本公司正在评估这一标准对其基本报表和相关披露的影响。

在2023年12月，FASB发布了ASU 2023-09，《所得税（主题740）：所得税披露的改进》（以下简称“ASU 2023-09”）。ASU 2023-09要求增强有关税率调节和支付的所得税信息的年度披露。ASU 2023-09自2024年12月15日之后开始的年度期间生效，并可前瞻性或追溯性采用。允许提前采用。公司正在评估此标准对其基本报表和相关披露的影响。

公司在资产和负债的评估中，使用在交易当日有市场参与者之间的买方或卖方交易中产生的价格来衡量其资产和负债的公允价值。公司制定了基于用于衡量公允价值的输入的公允价值层次结构。

公司自2023年1月1日起采用ASU 2016-13。公司将某些金融资产和负债计入公允价值。有关公允价值的会计指导框架提供了一种衡量公允价值的方法，澄清了公允价值的定义，并扩大了有关公允价值衡量的披露。公允价值被定义为在报告日市场参与者之间进行有序交易时可获得的出售资产或转让负债（退出价格）。会计指导建立了一个三层次的层次结构，优先考虑在衡量公允价值时所使用的估值方法的输入，如下所示：

•

一级：包括在活跃市场上对相同资产和负债的报价。

•

二级：除了可观察到的一级之外的输入，例如类似资产或负债的报价；不活跃市场的报价；或者可观察到或可通过可观察到的市场数据证实的其他输入，实际上占据了资产或负债的全部期限。

•

公司对所有要求在财务报表中认可或披露公允价值的金融资产、负债和非金融资产、负债采用公允价值会计。公司通过在活跃市场中的相同资产的报价确定一级资产的记账价值。公司在每个计量日评估交易活动和定价以确定二级投资。二级输入来自各种第三方数据提供者，代表在活跃市场上类似资产的报价，并从可观察的市场数据中得出，或者如果不是直接可观察的，则是从可观察市场数据中推断或获得证明。在某些情况下，当在衡量估值时存在限制活动或较少的透明度时，证券被归类为估值层次内的三级。在2024年6月30日或2023年12月31日，公司没有使用三级输入计量的金融资产或负债。公司本报告中披露的公允价值已根据公司定义的公允价值层次结构编制。

公司的主要金融工具包括现金、现金等价物和投资、预付费用、应付账款以及应计负债。除了现金等价物和投资外，公司金融工具的账面金额因其相对较短的到期时间而与公允价值大致相符。

下表展示了公司的金融资产，包括分类为可供出售投资的现金等价物和投资，这些资产定期按公允价值计量（以千计）：


	2024年9月30日
	级别	摊销成本		未实现收益		未实现损失		估算公允价值
货币等价物：
货币市场基金	一级	$	12,025	$	—	$	—	$	12,025
商业本票	二级		9,933		2		—		9,935
短期投资：
美国财政证券	一级		31,626		69		—		31,695
商业本票	二级		17,706		23		—		17,729
美国政府机构证券	二级		8,498		15		—		8,513
企业债务证券	二级		1,982		3		—		1,985
总计		$	81,770	$	112	$	—	$	81,882


	2023年12月31日
	级别	摊销成本		未实现收益		未实现损失			估算公允价值
货币等价物：
货币市场基金	一级	$	4,478	$	—	$	—		$	4,478
短期投资：
美国财政证券	一级		15,649		31		—			15,680
美国财政证券	二级		1,247		—		(1	)		1,246
商业本票	二级		41,472		47		(2	)		41,517
美国政府机构证券	二级		19,479		30		(5	)		19,504
资产支持证券	二级		8,770		12		(3	)		8,779
企业债务证券	二级		4,914		8		—			4,922
长期投资:
美国财政证券	一级		23,542		131		—			23,673
美国政府机构证券	二级		3,494		28		(1	)		3,521
总计		$	123,045	$	287	$	(12	)	$	123,320

公司将其货币市场所有基金类型和美国国债证券分类为公允价值层级中的第一级资产，价值基于活跃市场中的报价市场价格，且没有估值调整。

公司将其对美国国债证券、商业票据、美国政府机构证券、资产支持证券和公司债券证券的投资分类为公允价值层级中的第二级。这些投资的公允价值通过考虑从第三方定价服务获得的估值来估算。定价服务采用行业标准估值模型，包括收入和市场基础的方法，所有显著输入均可观察到，直接或间接，来估算公允价值。这些输入包括已报告的交易和同类或相似证券的经纪商/交易商报价、发行人信用利差、基准证券、基于历史数据的提前还款/违约预测及其他可观察输入。没有在估值层级之间有金融工具的转移。财务报表中的货币翻译调整

截至2024年9月30日, 没有公司的可供出售投资中，有一项处于未实现亏损状态的投资已经超过12个月处于亏损状态。在此期间， 2024年和2023年截至9月30日的九个月公司并未对其在Ampere的投资进行任何公允价值的增减。没有不出售任何可供出售的投资。

截至2024年9月30日，公司的短期投资到期日距资产负债表日不足一年。

公司没有意向在未实现的亏损头寸中卖出证券，并且不认为他们需要在未摊销成本基础收回证券之前出售证券。此外，公司评估了其证券的信用损失，并认为市场价值下降主要归因于当前经济和市场条件，而非信用相关。因此，没有截至2024年9月30日和2023年12月31日，公司已确认信用损失准备金。在截至2024年9月30日和2023年之间的九个月内不认可任何与投资相关的减值损失。公司并未对其在Ampere的投资进行任何公允价值的增减。没有t 不认可任何与投资相关的减值损失。

截至2024年9月30日和2023年12月31日公司应收利息为$0.3 百万美元和美元0.4 百万美元，分别计入预付费用和其他流动资产于未经审计的中期摘要资产负债表。

注4.资金安排

NIAID合同

2022年9月，公司收到NIAID授予的成本报销合同，用于支持前期、1期研究和其他活动，以推动epetraborole进入晚期发展阶段，用于治疗急性全身型痛风杆菌病和其他生物威胁病原体。公司有资格在总共的期限内获得高达$17.8 百万美元的资金，包括基期和七个期权期。在2023年7月和2024年5月，NIAID行使了 48个月期二的七根据NIAID合同（编号：75N93022C00059）提供的其他选项，导致已承诺合同资金增加$0.7 百万美元和美元3.8 百万分别用于累计总额为$的基金8.8百万美元。这些选项的资金将延长当前合同的预计完成时间 29个月超出基准期限的 18个月到2026年8月。截至2024年9月30日，共计$8.8 百万美元的资金用于 18个月的基期，另外再额外 29个月，总共 47个月已经承诺。

截至2024年9月30日公司截至2023年12月31日已记录应收账款$0.7 百万美元和美元0.4 百万美元，分别计入资产负债表的预付费用和其他流动资产。在截至2024年9月30日的三个和九个月内，公司记录了$三个月和九个月截至2024年9月30日，0.7 million of income under the NIAID contract as a reduction in research and development operating expenses. During the three and nine months ended September 30, 2023, the Company recorded zero income under the NIAID contract as a reduction in research and development operating expenses.

UGARF Grant

In September 2022, the Company entered into a subcontract agreement with the UGARF to conduct preclinical activities on behalf of UGARF (“UGARF Agreement”). The UGARF reimburses the Company under an award from Wellcome. The Company is eligible to receive up to $1.4 million from the UGARF to support preclinical development of a boron-containing small molecule for Chagas disease. In July 2024, the Company signed an amendment to the UGARF Agreement for additional funding in the amount of $0.2 百万美元。截至 2024年9月30日 and December 31, 2023, the Company had recorded a grant receivable of zero and $0.6 分别为2000万美元和1000万美元，已计入预付费用和资产负债表上的其他流动资产。在 2024年9月30日结束的三个和九个月内，分别为，公司分别记录了收入零 and $0.1 2000万美元和1000万美元，作为UGARF协议下研发营业费用减少。在 2023年9月30日结束的三个和九个月内，分别为，公司记录了收入$0.4 百万美元和美元0.7 百万美元分别作为UGARF协议下研发营业费用的减少。

BMGF资助

2023年9月，公司获得了来自比尔和梅琳达·盖茨基金会的成本报销合同奖励（“2023 BMGF协议”），根据该协议，公司获得了1.8 百万美元，用于支持发现新型含硼小分子以治疗结核病和疟疾。公司必须将其在2023 BMGF协议下收到的资金全部用于与该研究项目相关的直接成本。公司预先获得了1.0 百万美元的资金，并跟踪和报告向BMGF发生的符合条件的费用。2024年4月，公司获得了0.8 百万美元的资金，使资助完全得以实现。任何未使用的资金以及尚未发生的资金支出都将记录为资产负债表上其他流动负债的一部分。

2024年9月，公司与比尔及梅琳达·盖茨基金会签订了第二年的延续费用补偿合同（“2024年BMGF协议”），根据该合同，公司获得了 $2.0 百万美元用于支持一项早期研究计划，该项目侧重于提供新的线索，以此作为新药的起点，这些新药可以组合起来提供更短、更安全、更简单的结核病药物治疗方案。公司必须将其根据2024年BMGF协议获得的资金仅用于与该研究计划相关的直接费用。公司收到了 $1.1 预付一百万美元的资金，并跟踪和报告向BMGF产生的符合条件的费用。任何未用资金和任何尚未发生的支出资金均作为其他流动负债的一部分记入资产负债表。

截至2024年9月30日和2023年12月31日，该公司的记录为美元1.3 百万和美元0.7 百万美元分别转为资产负债表上的其他流动负债。在截至2024年9月30日的三个月和九个月中，公司的收入为美元0.4 百万和美元1.3 根据2023年BMGF协议，分别减少了研发运营支出。在截至2023年9月30日的三个月和九个月中，公司的收入为美元24 千作为2023年BMGF协议下研发运营开支的减少。

注5. 合作与许可协议

Anacor许可协议

在2019年11月，公司与Anacor制药公司（“Anacor”）签订了一项独占的全球许可协议，涉及Anacor控制的某些化合物和其他知识产权，用于治疗、诊断或预防所有人类疾病（“Anacor许可”）。Anacor许可将在最后一项版税条款到期时终止。任何一方可因另一方的重大违约在补救期后终止Anacor许可，或在与另一方相关的某些破产事件发生后立即终止。公司有权在书面通知后，在首次监管批准之前或之后的通知之前，方便地终止协议。每个90天期末支付利息。书面通知，直至首次监管批准或一年之后的通知。此外，因前述原因终止Anacor许可后，相关的权利和许可将终止。

作为交换，公司支付了Anacor一笔不可退款的$2.0 百万美元的预付款，并授予AnacorA系列可赎回可转换优先股的股份。

公司还同意在各项开发里程碑达成时向Anacor支付进一步款项，累计最高为$2.0 百万，在达到各种商业和销售门槛里程碑时，支付累计最高款项为$125.0 百万，以及高达 50%的版税，具体取决于某些子许可安排。版税需根据某些常规规定进行调整，包括缺乏专利保护和仿制药进入。公司还同意根据许可证协议中定义的发展中国家或发达国家的状态，以分级边际版税率向Anacor支付不可退款和不可抵消的销售版税。销售版税是净销售额的一定百分比，具体在Anacor许可协议中规定，区间为中低个位数（按世界银行分类的开发中国家）和其他国家或中国、香港、台湾及澳门地区的中低十位数，前提是净销售额达到低十万的最低水平。销售版税需要根据每种产品和每个国家进行支付，直至发生以下情况中的最新情况 15年在产品首次商业销售的日期、所有监管或数据独占权的到期日，或在该国家覆盖该产品的有效授权专利的最后有效权利要求到期日期之后。当前，覆盖epetraborole的授权专利在授权地区的最后有效权利要求的到期日期是2028年6月。此外，Anacor在公司控制权变更时有权获得一定的里程碑付款。

在2021年12月，公司对Anacor许可进行了修订，涉及Anacor控制的某些化合物和其他知识产权，用于治疗、诊断或预防某些细菌病原体（“Anacor许可修订”）。Anacor许可修订对Anacor许可的财务条款没有影响。

在截至2024年和2023年9月30日的三个月和九个月期间，没有确认任何开发、监管、商业或销售里程碑或特许权使用费支付。因此，公司没有在合并的运营报表中记录任何研发费用——相关方。没有在合并的运营报表中没有记录任何研发费用——相关方。截至2024年和2023年9月30日的三个月和九个月期间。

Brii生物科学协议

在2019年11月，公司签署了一项许可协议，授予Brii Biosciences Limited在中国、香港、台湾和澳门独家开发和商业化某些化合物的权利，用于治疗人类疾病。公司没有没有不会收到预付款，但有资格获得高达$15.0 百万的开发和监管里程碑总额，以及$150.0 百万的商业里程碑，前提是达到销售阈值。公司还享有分级中个位数到高个位数的基于销售的特许权使用费。这些销售特许权使用费要求按产品和地域板块逐个支付，直到发生以下情况中的最后一次： 15年产品首次商业销售的日期，所有监管或数据独占的到期，或覆盖该产品在该地域板块的物质成分或批准用途的许可专利的最后到期权利的到期。覆盖许可地域板块内的物质成分或批准用途的许可专利的最后到期有效权利是2028年6月。未来的里程碑付款和特许权使用费将依据ASC 606进行核算。

注6. 资产负债表元件

应计负债

应计负债包括以下内容（以千为单位）：


	9月30日,		2023年12月31日,
	2024		2023
应计研发相关费用	$	4,838	$	6,555
应计专业服务费用		47		24
其他		36		102
总应计负债	$	4,921	$	6,681

注7.承诺和或有事项

备用金

公司不时可能会参与到普通业务过程中产生的法律程序中。截至2024年9月30日和2023年12月31日，公司并未受到任何重大法律程序的影响，目前公司也不是任何法律程序的当事方。如果结果对公司不利，管理层认为，这种情况目前预计将在个别或总体上对公司的业务、财务状况或整体运营结果产生重大不利影响。

担保和赔偿

根据特拉华州法律以及经过修订的公司章程和章程细则，并根据与某些高管和董事的赔偿协议，公司为其高管和董事在其请求下以此身份提供赔偿，针对特定事件或情况，受限于某些限制。赔偿期的期限持续到高管或董事可能面临的任何因其在此身份下的作为或不作为所产生的程序为止。未来赔偿的最大潜在金额是无限的；然而，公司目前持有董事和高管责任保险。该保险限制了公司的风险，并可能使其能够收回部分任何未来支付的金额。公司认为这些赔偿义务的公允价值是微乎其微的。因此，公司没有在任何报告期内确认与这些义务相关的任何负债。

辅助全球健康协议

2019年和2020年，辅助全球健康科技基金L.P.（“辅助”）投资于公司的A系列可赎回可转换优先股融资时，公司与辅助签订了全球健康协议，根据该协议，公司同意通过公共卫生项目和私营购买者在低收入和中低收入国家（根据世界银行和协议的定义）支持创新且价格合理的药物的创建。

辅助的投资支持公司产品候选药物epetraborole的发展，以用于协议中定义的美沙酮流行和美沙酮高风险国家。这些全球准入承诺自A系列可赎回可转换优先股融资的结束日期起生效，并将保持有效，直到辅助不再是公司的股东。十年获得监管机构批准，使用epetraborole治疗马利奥病。

全球健康协议包含公司同意的各种肯定和否定条款，包括合理努力使用非稀释资金开发约定产品，并在目标国家向有需要的人提供帮助，前提是公司不以亏本价格销售产品。其他条款包括禁止使用投资进行宣传，试图影响立法，影响任何公共选举或选民登记活动，或促进恐怖活动，以及遵守某些环保、社会和治理要求以及反腐败要求。如果公司未能遵守这些非财务条款，则Adjuvant可能有权要求偿还其未用于全球健康协议中列明目的的任何投资部分。

与Adjuvant在2021年对公司的B系列可赎回可转换优先股融资的投资相结合，公司签署了一份修订和重述的全球健康协议（“Adjuvant修正案”）。Adjuvant修正案扩大了Adjuvant的投资支持，包括为公司产品候选者epetraborole的开发，旨在满足结核病流行和结核病高风险国家的需求。

与Adjuvant在公司首次公开募股（IPO）中的普通股投资相关，公司签署了一份修订和重述的全球健康协议，日期为2022年3月24日（“Adjuvant IPO修正案”）。作为Adjuvant IPO修正案的一部分，Adjuvant于2022年3月购买了 166,666 公司普通股的股份，总额为 $2.5 百万，这笔投资在公司未将Adjuvant的投资收益用于商定目的时，Adjuvant有权要求偿还。

注8产权

普通股

公司的公司章程经修改，授权公司发行最多 500,000,000$，总股数0.00001 面值普通股。普通股股东有权一份每股投票权对公司股东将要表决的所有事项。

Subject to the preferences that may be applicable to any outstanding shares of preferred stock, the holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors (the “Board”). No dividends have been declared to date.

On April 6, 2023, the Company entered into a Sales Agreement with Cowen and Company, LLC as the Company’s Agent, to issue and sell up to an aggregate gross sales of $100.0 million in Shares of the Company’s common stock through the ATm Offering. During the year ended December 31, 2023, the Company issued and sold 2,502,000 通过ATM发行，获得净收益为$百万，扣除佣金和其他发行费用后。公司没有在19.1 年通过ATM发行出售任何普通股没有。财务报表中的货币翻译调整

2023年8月15日，公司与Cowen and Company, LLC、Leerink Partners LLC和Evercore Group L.L.C.签订了一份包销协议，作为多家包销商的代表发行并卖出 7,777,778 普通股的发行价格为每股9.00 每股通过包销发行，净收益为$65.5 百万美元，扣除佣金和其他发行成本后

作为未来发行的普通股份，按照折合计算基准，截至2024年9月30日和2023年12月31日，包括以下内容：董事会保留的普通股份，按照折算计算基准，截至2024年9月30日和2023年12月31日，包括以下内容：


	9月30日,		2023年12月31日,
	2024		2023
已发行且流通的期权		4,848,549		3,930,306
未获授限制性股票单位		470,809		—
授权用于未来发行的期权		998,888		1,254,721
ESPP，授权用于未来发行		563,731		337,017
总计		6,881,977		5,522,044

优先股

公司章程，经修订，授权公司最多发行 10,000,000$，总股数0.00001 面值优先股。该优先股不可转换。 No 优先股股份截至发行并持有。 2024年9月30日和2023年12月31日。

股东权益计划

2024年8月15日，公司与Equiniti Trust Company, LLC签订了一项权利协议，该协议由董事会批准。有关权利协议，宣布发放了一份优先股购买权（单个为“权利”，集体为“权利”），每股公司普通股的面值为$0.00001 ，于2024年8月29日营业结束时（“登记日期”），每股公司在外流通的普通股登记持有人拥有一个权利，自权利可行使之时起持有，直至 2025年8月15日（或权利较早的赎回、交换或终止）公司有权向注册持有人出售每股A类优先参与优先股的千分之一，面值为$0.00001 每股，公司“A系列优先股”价格为$6.50 每一千分之一A系列优先股股份的价格，根据调整。权利只有在分配日（在权利协议中定义）后才可行使，且在有效期至。 2025年8月15日，公司有权延长此日期，除非公司提前赎回或交换或终止。有关股东权益计划的其他信息包含在2024年8月19日提交给SEC的8-k表格中。实施股东权益计划对公司的财务状况没有影响。

注9. 股权激励计划和基于股票的补偿

2022股权激励计划

公司在首次公开募股（IPO）完成时采纳了2022股权激励计划（“2022计划”），该计划规定向公司员工授予激励股票期权（“ISO”），并向员工、董事和顾问授予非法定股票期权（“NSO”）、股票增值权、限制性股票奖励、限制性股票单元（“RSU”）、业绩奖励和其他形式的奖励。截至2024年9月30日，, 没有股票增值权、限制性股票奖励或业绩奖励已被发行。

公司最初为2022计划预留了 1,870,000 根据2022计划发行的新普通股。公司的2017股权激励计划（“2017计划”）于2022年中止；然而，股份根据2017计划授予的未分配股票奖励将继续受2017计划的约束。2017计划下可用的股票已增加到2022计划中可用的股票中。根据2017计划授予的未分配股票奖励，如果到期、被公司回购、被没收、被取消或被保留的股票也将保留用于2022计划的发行。

根据2022计划可能发行的公司普通股的初始数量将不超过 4,423,920 公司的普通股的股份，这等于(i) 1,870,000 新发行的股份，加上(ii) 2,553,920 与2017计划相关的股份。此外，根据2022计划保留发行的公司的普通股的数量将在每年的1月1日自动增加，持续性为十年，自2023年1月1日起，直至2032年1月1日，增加的数量等于(1) 4% 在前一年的12月31日公司已发行的普通股总数，或(2) 由公司董事会在前一年的12月31日之前确定的较少的股份数量。因此，自2024年1月1日起，2022计划中的股份数量增加了 1,189,657 股份，占Haofangtong股权的 4% 的去年年底流通普通股总数. 根据2022计划，可以行使期权或归属RSUs所发行的公司普通股的最大数量为 13,271,760 股份。

自公司成立以来至2024年9月30日，公司已向员工、董事和顾问发放了期权和RSUs。截至2024年9月30日, 998,888 2022计划下仍可供未来发行的普通股数量为

ISOs granted to newly hired employees under the 2022 Plan generally vest 25% after the completion of 12 months of service, and the balance vests in equal monthly installments over the next 36 months of service and expire 十年 from the grant date, unless subject to provisions regarding 10% stockholders. ISOs granted to existing employees generally vest ratably over a 48-month period of service and expire 十年 from the grant date. NSOs vest in accordance with the terms of the specific agreement under which the options were provided and expire 十年自授予之日起员工获得的 RSUs 一般会按季度或年度分批授予，并在一定的服务期后到期。二 to 四年服务期内到期十年从授予日期开始计算，这些期权将到期。

股票补偿费用

下表总结了公司在截至2024年和2023年9月30日止三个和九个月内，在利润表和综合损益表中承认的以股票为基础的薪酬费用的组成部分。三个和九个月截至2024年和2023年9月30日结束时的情况（以千为单位）：


	截至9月30日的三个月				截至9月30日的九个月
	2024		2023		2024		2023
研发费用	$	796	$	1,045	$	3,164	$	3,113
一般和行政费用		1,106		1,124		3,394		3,067
总计	$	1,902	$	2,169	$	6,558	$	6,180

期权活动

股票期权活动总结如下：


	期权总数未公开			加权平均行权价格		加权平均剩余合同期限 (以年计)		总内在价值 (以千为单位)
2023年12月31日未行使的股票期权		3,930,306		$	10.86		8.14	$	37,853
已授予		1,471,199		$	2.63
已行权		(28,930	)	$	7.78
被取消		(524,026	)	$	8.78
已投资并预计在2024年9月30日完全投资		4,848,549		$	8.61		6.54	$	176
截至2024年9月30日可行使的期权		2,773,130		$	9.36		5.45	$	176

截至2024年9月30日，公司尚未承认的股权报酬费用为 $10.6 百万，涉及未获授的期权，公司预计将在加权平均期间内确认 1.7 y年。

2024年9月30日结束的九个月内授予的期权的加权平均授予日期公允价值为 $2.23 per share.

RSU活动

RSU赋予持有者在归属时获得公司普通股的权利。RSU的公允价值基于授予日期公司普通股的收盘价格。

RSU活动的总结如下：


	单位数目			加权平均授予日公允价值
2023年12月31日的未归属股份		—		$	—
已发行		698,096		$	2.73
已归属和释放		(27,508	)	$	2.98
被取消		(199,779	)	$	2.62
2024年9月30日前尚未获授的股份		470,809		$	2.76

2022员工股票购买计划

公司的2022年员工股票购买计划（“ESPP”）有两个元件：一个是旨在根据《法典》第423条款合格的“员工股票购买计划”（“423 元件”），另一个是未旨在合格的（“非423元件”）。ESPP允许符合条件的员工通过工资扣除以折扣价购买公司的普通股。 15%的符合资格补偿。在每个发行期结束时，员工可以以公司的普通股在发行期开始时或每个适用购买期结束时的公平市场价值中的较低者的", 85%的价格购买股票。

在某些资本化事件的情况下，可能会进行调整， 187,000 在ESPP采用时可购买公司的普通股。根据ESPP，按照永续条款，年度股票增加量是基于至少（i）截至前一年12月31日公司流通在外的普通股的 1%，(ii) 561,000 股，或(iii)董事会确定的股数。因此，自2024年1月1日起，ESPP中的股份数量增加了 297,414 股份，占Haofangtong股权的 1%，这是前一年末流通在外的普通股的基础上增加的。. 截至2024年9月30日， 563,731 普通股的股份在员工股票购买计划下仍可发行。

截至2024年9月30日的三个月和九个月期间，公司确认了一笔微不足道的金额和$0.1 百万，分别计入与员工股票购买计划相关的基于股票的薪酬费用。在 2023年9月30日结束的三个和九个月内，分别为公司分别认定了$0.1 百万美元和美元0.2 与员工股票购买计划相关的基于股票的薪酬费用中，分别为百万。

注10每股净亏损

以下表格列示了基本和摊薄每股净亏损的计算（以千为单位，除了股数和每股金额）。


	截至9月30日的三个月						截至9月30日的九个月
	2024			2023			2024			2023
分子：
归属于普通股股东的净损失	$	(12,747	)	$	(16,707	)	$	(43,799	)	$	(47,834	)
分母：
用于计算每股亏损的加权平均普通股，基本和稀释后。		29,841,169			25,645,421			29,809,839			21,532,537
每股普通股股东净亏损，基本与稀释后	$	(0.43	)	$	(0.65	)	$	(1.47	)	$	(2.22	)

由于公司在所有报告期内处于亏损地位，基本每股净亏损与每股稀释净亏损相同，因为包括所有潜在的普通股份将具有反稀释效果。未包括在摊薄每股收益计算中的可能稀释证券因为会对减少每股收益产生反向影响，所以下列证券计入摊薄每股收益计算:


	9月30日,
	2024		2023
已发行和未行使期权		4,848,549		3,821,869
未归属的RSU		470,809		—
尚未实现的期权股普通股提前行使		560		7,295
总计		5,319,918		3,829,164

附注11. 关联交易

截至2024年和2023年9月30日的九个月内公司分别拥有未行使的权证作为负债。没有与相关方的重大交易。

注释 12.重组费用

2024 年 8 月 8 日，该公司宣布削减约 50公司员工百分比，经董事会批准，与公司计划有关重组在 EBO-301 研究终止之后，进一步扩大公司的运营资本。与裁员有关，公司确认的遣散费和其他费用为美元2.2 每人一百万截至 2024 年 9 月 30 日的三个月和九个月，主要由 $ 组成2.6 百万美元与遣散费和其他员工解雇相关费用有关，部分由美元抵消0.4 由于对与某些已解雇的员工签订的咨询协议进行了修改，股票薪酬支出减少了100万英镑。遣散费和其他费用记入简明运营报表和综合亏损报表中的重组费用。该公司预计，裁员工作将在今年年底前基本完成 2024。美元现金支付2.1 百万是在截至2024年9月30日的三个月和九个月。截至 2024 年 9 月 30 日，公司累积了美元0.5 简明资产负债表上与预计将在2025年第一季度支付的未付遣散费相关的应计薪酬低于100万英镑。

项目1 控件2. 管理层的财务状况和业绩分析。

以下关于我们截至2024年9月30日的财务状况及2024年和2023年截止9月30日的三个月和九个月营业结果的讨论与分析，应与我们在本季度报告表10-Q（“表10-Q”）中包含的简明基本报表及相关附注共同阅读，以及作为我们2023年12月31日结束的年度报告表10-K一部分包含的审计基本报表和相关附注。除非本表10-Q中另有说明或上下文另有要求，否则本表10-Q中对“AN2”、“公司”、“我们”、“我们”和“我们的”的引用均指代AN2 Therapeutics, Inc.

本讨论和分析以及本表格10-Q的其他部分包含基于当前信念、计划和预期的前瞻性声明，这些声明与未来事件及我们的未来财务绩效相关，涉及风险、不确定性和假设，例如关于我们对业务的意图、计划、目标和预期的声明。我们的实际结果及某些事件的时间安排可能因多种因素而与这些前瞻性声明所描述或暗示的内容有重大差异，包括本表格10-Q第二部分第1A项中列出的“风险因素”。另请参阅标题为“关于前瞻性声明的特别说明”的部分。

概览

我们是一家生物制药公司，专注于从我们的硼化学平台发现和开发新型小分子疗法。AN2目前正在开发一系列基于硼的化合物，针对恰加斯病、非结核分枝杆菌（“NTM”）和墨尔登热，同时还有早期阶段的项目，专注于传染病和肿瘤学领域的目标。

自2019年11月开始运营以来，我们将几乎所有的研发资源投入到了开发首个药物候选产品epetraborole上，该产品是用于治疗难治性复合物的复杂（“MAC”）肺部疾病，是NTm肺部疾病的一种形式。2024年8月8日，我们宣布了EBO-301研究的2/3期评估epetraborole在优化背景方案（“OBR”）之上的疗效难治性MAC肺病的二期部分的头号结果。研究的二期部分达到了展示一种新型患者报告的结果（PRO）工具和epetraborole + OBR组（39.5％）与安慰剂 + OBR组（25.0％；治疗差异13.9％，p=0.19）具有更高PRO基础临床反应率的主要目标。在第6个月的痰培养转变率，即关键次要终点，治疗组之间相似（epetraborole + OBR组为13.2％，安慰剂 + OBR组为10.0％；治疗差异3.4％，p=0.64）。在试验中，epetraborole通常耐受性良好。

在宣布这些结果后，我们开始进一步审查第2阶段的数据，以确定该计划未来的最佳发展路径。到目前为止，我们已经确定在两项患者报告结果（PRO）分析中有名义上具有统计学意义的结果，表明epetraborole患者在改善临床症状方面优于安慰剂患者。首个指标为预先设定的生活质量（支气管扩张）（QoL-B）PRO的次要终点显示，通过最小二乘均值（LSM）方法计算，接受epetraborole治疗的患者在症状改善方面表现出显著统计学意义。值得注意的是，这个是同一终点Insmed, Inc.最近宣布为原发性端点的ENCORE第3期MAC治疗试验中的。第二个是后验分析 LSm 计算的MACrO2 PRO结果，也显示出EPetraborole患者与安慰剂组相比在临床症状改善方面具有显著统计学意义。我们相信这两个发现提供了潜在的临床概念证明，并且两项PRO测量改进似乎符合FDA的建议，反映在最近的指导文件中，即用于支持NTm药物批准的试验应将基于PRO的临床结果作为主要终点。我们将继续进行数据分析，并计划于2025年上半年要求与FDA进行第2阶段结束会议，讨论重新启动TR-MAC关键第3期试验的潜力。

在我们持续评估epetraborole在NTm中的未来发展机会时，我们已经推进了我们的管线项目。到2025年，我们预计将在查加斯病中启动一期临床试验，并在美利奥病中进行二期概念验证试验。我们还预计将在肿瘤学和感染疾病的早期阶段项目中取得进展，以在2025年生产多达三种开发化合物。

2024年8月8日，我们还宣布将我们的员工减少约50%，该决定经董事会批准，与我们计划的重组有关，重组是在停止EBO-301研究后进行的，以进一步延长我们的运营资金。与裁员相关，我们确认了截至2024年9月30日的三个月和九个月内的遣散费及其他费用共220万美元，主要包括与遣散支付和其他员工终止相关的费用260万美元，部分抵消了由于对与某些被解雇员工签署的咨询协议应用修改会计法而导致的股票补偿费用减少40万美元。我们预计，到2024年底，裁员将基本完成。

到目前为止，我们已经承担了重大的营业费用。我们预计随着我们推进当前和未来的产品候选物通过临床前、非临床和临床开发，寻求监管批准，并为商业化提前准备并在获得批准后进行；收购、发现、验证和开发额外的产品候选物；获取、维护、保护和执行我们的知识产权组合；雇佣额外人员；并承担作为一家上市公司而产生的费用。

我们没有任何获批销售的产品，自公司成立以来也未产生任何营业收入。截止2024年9月30日的九个月内，我们的净损失分别为4380万美元和4780万美元。到2024年9月30日，我们的累计亏损为19830万美元。我们的运营资金来源于可赎回可转换优先股的销售和发行，以及我们的首次公开募股（“IPO”）、市场发行股票计划（“ATm Offering”）和承销发行（“Underwritten Offering”）的收入。从2019年11月到2020年10月，我们通过销售A系列可赎回可转换优先股筹集了1200万美元的资金。2021年3月，我们通过销售B系列可赎回可转换优先股筹集了8000万美元的资金。在2022年3月和4月，我们完成了首次公开募股，筹得的总收入为7940万美元，扣除承销折扣、佣金和发行费用后的净收入为7040万美元。2023年6月，我们通过市场发行筹集的总收入为2000万美元，扣除佣金和发行费用后的净收入为1910万美元。2023年8月，我们通过承销发行筹集的总收入为7000万美元，扣除佣金和发行费用后的净收入为6550万美元。

截至2024年9月30日，我们拥有9340万美元的现金、现金等价物和投资。我们相信我们可供使用的现金将足以支持我们按照当前经营计划进行计划的运营至少延续本10-Q表格日期后的十二个月。

我们产生产品营业收入的能力将取决于我们一个或多个产品候选者的成功开发、监管批准和最终商业化。在我们能够从产品销售中产生收入之前，如果有的话，我们预计将通过私人或公开股权或债务融资、与企业来源的合作或其他安排、非稀释性融资或其他融资来源来为我们的运营融资。适当的资金可能无法以可接受的条款提供给我们，甚至完全无法获得。如果我们未能在需要时筹集资本或达成这样的协议，我们可能会不得不显著延迟、缩减或停止我们产品候选者的开发和商业化。

我们计划继续使用第三方服务提供商，包括外部研究实验室、临床研究组织（“CROs”）和合同制造组织（“CMOs”），以进行我们的临床前、非临床和临床开发，并制造和供应在开发和商业化我们的产品候选者过程中使用的材料。我们目前没有销售团队。如果我们获得任何产品候选者的监管批准，我们打算聘请并部署一个专业的销售团队，这将增加我们的运营成本。

由于我们的业务、临床开发和监管工作等多种因素的持续发展，我们的运营结果可能会因年度和季度而有很大变化，因此我们认为不同期间之间对我们运营结果的比较可能没有实际意义，也不应作为我们未来表现的指示。有关与我们的业务、临床开发和监管工作等多种因素相关的风险和不确定性的更多信息，请参见“第二部分第1A项—风险因素”。

我们的营业收入主要来自产品销售（红外相机、传感器和元件）、SaaS和附属服务。我们的大多数产品直接销售给客户或通过分销商销售，经常作为多摄像头系统进行捆绑销售，包括多年的软件和附属服务的订阅。这些系统需要初步和持续的技术支持，这些支持被包括在系统定价中。

运营费用

研发费用

我们的研发费用几乎全部由与我们首个产品候选者epetraborole以及其他产品候选者的开发相关的费用组成。这些费用包括与第三方（包括CRO、CMO、临床前和非临床测试机构，以及学术和非营利机构）达成协议所产生的费用。研发费用还包括咨询费、许可费、薪资和人员相关费用，包括工资和奖金、工资税、员工福利成本以及我们研发员工的非现金股权激励。我们将在发生时将内部和外部的研发费用进行支出。

我们预计未来研发费用将大幅增加，因为我们将我们的产品候选者推进到临床试验并寻求监管批准。进行必要的临床研究以获得监管批准的过程既昂贵又耗时。随着临床研究进入后期阶段，通常变得规模更大且费用更高，而我们需要对与临床研究费用相关的费用计提做出估计，这涉及一定程度的估算。我们产品候选者的成功开发存在很高的不确定性。我们产品候选者的实际成功概率可能受到与药物开发相关的各种风险和不确定性的影响，包括在本10-Q表格中“风险因素”部分中列出的风险。目前，我们无法合理估计完成当前或任何未来产品候选者剩余开发所需的性质、时间或成本。因此，由于这些不确定性，我们无法判断我们的研发项目的持续时间和完成成本，以及我们何时以及在多大程度上能够通过商业化和销售产品候选者来产生营业收入。

一般和行政费用

我们的管理和行政费用主要包括工资和与员工相关的费用，包括薪水和奖金、工资税、员工福利成本，以及非现金的基于股票的补偿。其他管理和行政费用包括追求我们知识产权的专利保护的法律费用，以及审计、税务、一般法律服务和其他外部咨询与供应商服务的专业服务费用。我们预计未来我们的管理和行政费用将继续增加，包括与法律、会计、监管和税务相关的服务费用，这些费用涉及遵守纳斯达克证券市场有限责任公司和证券交易委员会（"SEC"）的要求，以及董事和高管责任保险费用，以及投资者关系活动。

重组费用

我们的重组费用主要包括员工遣散费和其他与员工解雇相关的费用，同时减少了与某些被解雇员工签订的咨询协议相关的股票奖励支出。

其他收入，净额

其他收入净额包括我们在现金、现金等价物和投资上所赚取的利息收入和投资收入。

业务运营结果

2024年9月30日和2023年同比三个月的比较

下表列出了我们经营业绩的重要元件：


	三个月已结束
	九月三十日
	2024			2023			改变			百分比变化
	（以千计，百分比除外）
运营费用：
研究和开发	$	8,287		$	14,429		$	(6,142	)		(43	%)
一般和行政		3,484			3,751			(267	)		(7	%)
重组费用		2,243			—			2,243			100	%
运营费用总额		14,014			18,180			(4,166	)		(23	%)
运营损失		(14,014	)		(18,180	)		4,166			(23	%)
其他收入，净额		1,267			1,473			(206	)		(14	%)
净亏损	$	(12,747	)	$	(16,707	)	$	3,960			(24	%)

研发费用

截至2024年9月30日三个月的研究与开发费用为830万美元，相比于截至2023年9月30日三个月的1440万美元。610万美元的减少主要是由于临床试验费用、人员相关费用、临床前和研究费用、咨询和外部服务以及其他成本的减少，部分抵消了化学制造和控制（“CMC”）费用的增加。临床试验费用下降了430万美元，主要是由于终止了EBO-301试验。人员相关费用下降了120万美元，主要是由于我们的重组活动。临床前和研究费用下降了80万美元，主要是由于非稀释性资金支持费用的时间安排和某些研究项目优先级的重新安排。其他成本减少了30万美元，咨询和外部服务减少了10万美元。这些减少部分抵消了CMC成本增加的60万美元，这是由于与Chagas和melioidosis项目相关的CMC活动增加，部分抵消了2023年特定中间和注册批量制造活动的完成导致的较低成本。在截至2024年9月30日的三个月中，关于我们的资金安排的营业费用总计110万美元得到了确认。在截至2023年9月30日的三个月中，关于我们的资金安排的营业费用总计40万美元得到了确认，主要与CMC活动和研究项目有关。

以下表格显示了我们按活动类型划分的研发费用：


	截至三个月
	9月30日,
	2024		2023		变化			变更百分比
	(以千为单位，除了百分比)
临床试验费用	$	2,685	$	6,973	$	(4,288	)		(61	%)
人事相关费用		2,702		3,960		(1,258	)		(32	%)
咨询和外部服务		1,286		1,426		(140	)		(10	%)
临床前和研究费用		388		1,159		(771	)		(67	%)
化学制造和控制		1,102		537		565			105	%
其他费用		124		374		(250	)		(67	%)
研发总费用	$	8,287	$	14,429	$	(6,142	)		(43	%)

一般和行政费用

截至2024年9月30日的三个月内，一般和管理费用为350万美元，而截至2023年9月30日的三个月为380万美元。300,000美元的减少主要归因于专业服务费用减少300,000美元。

重组费用

截至2024年9月30日的三个月内，重组费用为220万美元，其中包括260万美元的遣散费和其他员工解雇相关费用，部分抵消了因对某些被解雇员工签订的咨询协议应用修改会计而导致的40万美元股票补偿费用的减少。在截至2023年9月30日的三个月内没有重组费用。

其他收入，净额

其他收入净额为2024年9月30日结束的三个月为130万美元，而2023年9月30日结束的三个月为150万美元。这20万美元的减少是由于2024年现金、现金等价物和投资余额较2023年更低所致。

2024年9月30日和2023年相比的九个月对比

下表列出了我们经营业绩的重要元件：


	九个月已结束
	九月三十日
	2024			2023			改变			百分比变化
	（以千计，百分比除外）
运营费用：
研究和开发	$	35,091		$	39,952		$	(4,861	)		(12	%)
一般和行政		10,856			10,868			(12	)		(0	%)
重组费用		2,243			—			2,243			100	%
运营费用总额		48,190			50,820			(2,630	)		(5	%)
运营损失		(48,190	)		(50,820	)		2,630			(5	%)
其他收入，净额		4,391			2,986			1,405			47	%
净亏损	$	(43,799	)	$	(47,834	)	$	4,035			(8	%)

研发费用

截至2024年9月30日的九个月，研发费用为3510万美元，而截至2023年9月30日的九个月为4000万美元。减少的490万美元主要是由于CMC费用、临床试验成本、临床前和研究学习费用及其他费用的减少，部分被咨询和外部服务以及人员相关费用的增加所抵消。CMC费用减少了370万美元，主要是由于2023年中间和注册批次制造活动的完成，以及在终止EBO-301试验后减少的epetraborole开发活动。临床试验费用减少了100万美元，因EBO-301试验的第二阶段部分完成及第三阶段部分终止。临床前和研究学习费用减少了90万美元，主要是由于与epetraborole相关的活动和合同研究的减少，部分被早期研究项目增加所抵消。其他费用减少了30万美元。这些费用部分被咨询和外部服务费用增加90万美元以支持我们的合同和早期研究工作，以及人员相关费用增加10万美元所抵消。在截至2024年9月30日的九个月期间，确认了200万美元的营业费用报销，涉及我们的资金安排。在截至2023年9月30日的九个月期间，确认了70万美元的营业费用报销，主要涉及CMC活动和研究工作。

以下表格显示了我们按活动类型划分的研发费用：


	九个月已结束
	九月三十日
	2024		2023		改变			百分比变化
	（以千计，百分比除外）
临床试验费用	$	13,128	$	14,113	$	(985	)		(7	%)
人事相关费用		12,047		11,959		88			1	%
咨询和外部服务		4,141		3,226		915			28	%
临床前和研究费用		2,175		3,066		(891	)		(29	%)
化学制造和控制		2,789		6,449		(3,660	)		(57	%)
其他开支		811		1,139		(328	)		(29	%)
研发费用总额	$	35,091	$	39,952	$	(4,861	)		(12	%)

一般和行政费用

截至2024年和2023年9月30日，管理和行政费用为1090万美元。

重组费用

截至2024年9月30日，重组费用为220万美元，包括260万美元的遣散费和其他雇员解雇相关支出，部分被应用于与特定被解雇员工签订的咨询协议的修改会计减少的40万美元股权补偿费用部分抵消。2023年9月30日前九个月没有重组费用。

其他收入，净额

其他收入净额在2024年9月30日结束的九个月内为440万美元，而在2023年的九个月内为300万美元。140万美元的增长是由于2024年与2023年相比，利率期货较高，现金、现金等价物和投资余额较高。

流动性和资本资源

流动性来源

自成立以来，我们一直处于净亏损状态。在截至2024年9月30日和2023年9月30日的九个月内，我们分别发生了净亏损4380万和4780万，并预计在未来的期间将遭受大量额外亏损。截至2024年9月30日，我们的累计亏损为19830万。截至2024年9月30日，我们拥有现金、现金等价物和投资9340万。根据我们当前的业务计划，我们相信现有的现金将足以支持我们计划的运营，至少在本表格10-Q日期后的12个月内。

到目前为止，我们主要通过我们的承销发行、ATm发行、首次公开募股和私募配售来为我们的运营提供资金。在2023年8月，我们通过承销发行大约产生了6550万美元的收入，扣除佣金和发行费用。在2023年6月，我们通过ATm发行大约产生了1910万美元的净收益，扣除佣金和发行费用。在2022年3月和4月，我们从首次公开募股中获得了大约7040万美元的净收益，扣除承销折扣、佣金和发行费用。在首次公开募股之前，我们通过可赎回可转换优先股的发行筹集了9160万美元。在我们的首次公开募股结束时，所有未偿还的可赎回可转换优先股股份都转换为我们普通股的股份。

截至2024年3月31日，考虑到我们2024年4月从ATM计划获得的2360万美元的净收益之前，我们的现金及现金等价物和短期投资为9930万美元。我们预计根据我们当前的经营计划，我们现有的现金、现金等价物和短期投资将足以支持我们的计划运营，直到2026年。但是，我们对于我们财务资源支持我们的运营的期间的预测是一种前瞻性陈述，其中涉及风险和不确定性，实际结果可能有所不同。我们的估计是基于可能被证明是错误的假设，并且我们可能比预期更早地耗尽资本资源。此外，进行临床试验的过程是昂贵的，这些试验的进展和开支时间是不确定的。

我们尚未获得任何产品销售批准，并且从与客户签订的合同中也从未产生过任何营业收入。我们预计除非并直至获得目前和未来任何产品候选药物的监管批准并使其商业化，否则不会产生任何有意义的收入，但我们不知道这些事件将何时发生，或是否会发生。从历史上看，由于开发我们的最初药物候选产品 epetraborole 所需的持续努力，已经造成我们出现运营亏损和现金流负增长，包括进行正在进行的临床前和非临床研究、临床试验、注册API和药品生产材料制造，以及为这些业务提供一般性和行政支持。我们预计随着我们将产品候选推进临床开发，并寻求监管批准、准备并且（如果获批）进行商业化，并继续进行研究和开发工作，我们的负现金流将在接下来的几年内显著增加。我们面临着与开发新产品候选药物通常相关的所有风险，并且可能会遇到意想不到的支出、困难、问题、延迟和其他未知因素，这些因素可能对我们的业务产生不利影响。此外，我们预计将继续承担作为一家上市公司运营所需的成本。我们预计会需要在持续运营过程中获得大量额外资金，因为我们不预计在可预见的未来能够从经营活动中获得正现金流量。

在我们能够从产品候选者的商业化中产生足够的营业收入之前，甚至可能永远不能，我们预计将通过公开或股权投资发行或债务融资来满足我们未来的现金需求。额外的资本可能无法以合理的条件获得，如果能够获得的话。如果我们无法以足够的金额或对我们可接受的条件筹集额外的资金，我们可能不得不显著推迟、缩减或停止开发或商业化一个或多个当前或未来的产品候选者。如果我们通过发行股权或可转换债务证券筹集额外资金，可能会导致现有股东的股份稀释和固定支付义务增加。此外，作为向我们提供额外资金的条件，未来的投资者可能会要求并可能获得优于现有股东的权利。如果我们负债，我们可能会受到限制我们运营的契约的约束，这可能会削弱我们的竞争力，例如限制我们承担额外债务的能力，限制我们获取、出售或许可知识产权的能力，以及可能会对我们经营业务的能力产生负面影响的其他操作限制。此外，我们与第三方签订的任何未来合作可能在短期内提供资本，但我们可能不得不放弃对我们产品候选者的宝贵权利或以不利于我们的条件授予许可。上述任何情况都可能严重损害我们的业务、财务状况、运营结果和前景。

我们所依赖的运营资本需求预测是基于可能被证明不正确的假设，并且我们可能比预期更早地使用所有可用的资本资源。由于与研究、开发和产品候选者的商业化相关的众多风险和不确定性，我们无法估计我们的运营资本需求的确切金额。我们未来的资本需求取决于许多因素，包括：

•

我们当前和未来产品候选者的临床前和非临床开发活动及临床试验的范围、时间、进展速率、结果和成本；

•

获得我们药物候选品的监管批准的时间和成本;

•

我们当前及未来临床试验的入组时间；

•

开发和商业制造活动的范围和成本；

•

我们开发或收购的任何额外产品候选的数量和特征;

•

成功商业化的产品候选品的制造成本；

•

建立专业销售团队以预期产品商业化的成本;

•

商业化活动的成本，包括构建制造行业、市场营销、销售和分销成本；

•

我们能够维持现有并建立新的战略合作、许可或其他安排的能力，以及这些协议的财务条款，包括未来里程碑、版税或其他付款的时间和金额；

•

与我们的产品相关的任何证券集体诉讼、产品责任或其他诉讼；

•

吸引、招聘和留住技术人才所需的费用;

•

我们对运营、财务和管理系统的实施；

•

作为一家上市公司所需承担的持续成本；

•

涉及准备、申报、审理、维护、保护和执行我们知识产权组合的成本；和

•

未来任何通过批准的产品的销售时间、收据和金额，如果有的话。

对于我们目前和未来任何产品候选开发过程中的任何这些变量或其他变量的结果的改变均可能显著改变与该产品候选开发相关的成本和时间。此外，我们的运营计划可能会在未来发生变化，我们将继续需要额外的资金来满足运营需求以及与这些运营计划相关的资本需求。我们未来融入的任何债务融资可能会对我们施加额外的契约，限制我们的运营，包括限制我们承担留置权或其他债务、支付分红派息、回购我们的普通股、进行某些投资或参与某些合并、合并或资产出售交易的能力。我们融入的任何债务融资或额外股本可能包含对我们或我们的股东不利的条款。

我们可能无法获得足够基金类型以可接受条款或根本没有。如果我们未能在需要时筹集资金，可能会对我们的财务状况和追求业务策略的能力产生负面影响。如果我们无法在需要时筹集额外资金，则可能需要推迟、减少或终止部分或全部的开发项目和临床试验，或者可能还需要终止对我们当前和未来产品候选者的权利。如果我们需要与他人合作和其他安排以补充我们的资金，可能不得不放弃某些限制我们开发和商业化产品候选者的权利，或者可能具有对我们或我们的股东不利的其他条款，这可能会重大影响我们的业务和财务状况。

请查看本10-Q表格中标题为“风险因素”的部分，以获取与我们大量资本需求相关的其他风险。

现金流量表摘要

下表列出现金的主要来源和用途摘要：


	九个月已结束
	九月三十日
	2024			2023
	（以千计）
用于经营活动的现金	$	(43,984	)	$	(36,220	)
由（用于）投资活动提供的现金		61,469			(43,698	)
融资活动提供的现金		372			85,315
现金和现金等价物的净增长	$	17,857		$	5,397

经营活动现金流出净额

2024年9月30日结束的九个月中，经营活动使用的净现金为4400万美元，其中包括4380万美元的净亏损，主要是由于使用资金开发我们的首个药物产品候选者，以及我们的净营运资产和负债减少400万美元，部分抵消了非现金费用380万美元。我们的营运资产和负债减少主要是由于应计负债、应计报酬和应付账款减少，其他流动负债增加所致。非现金费用包括650万美元的股权补偿费用，部分抵消了投资折让净增值270万美元。

截至2023年9月30日，运营活动中使用的净现金为3620万美元，其中包括4780万美元的净亏损，原因是用于开发我们的初期药物产品候选者的基金，部分抵消的是我们的净营运资产和负债净额减少了690万美元以及非现金费用减少了470万美元。我们营运资产和负债的净减少主要是由于应计负债、应付账款和其他流动负债增加。非现金费用包括股权补偿支出620万美元，部分抵消了投资折让净增加150万美元。

投资活动提供的现金（使用）

截至2024年9月30日的九个月内，投资活动提供的净现金为6150万美元，主要包括来自投资到期的8380万美元收益，部分抵消了2230万美元的投资购买。

截至2023年9月30日，投资活动使用的净现金为4370万美元，主要包括11230万美元的投资购买和6860万美元的投资到期收益，部分抵消。

融资活动产生的现金流量

截至2024年9月30日的九个月内，融资活动提供的净现金为40万美元，其中包括通过员工股票购买计划发行普通股获得的20万美元和通过行使期权获得的20万美元。

截至2023年9月30日，融资活动提供的净现金为8530万美元，其中包括自承销发行的普通股净收益6580万美元，自ATM发行的普通股净收益1910万美元，自员工股票购买计划和股票期权行权的普通股发行收益40万美元。

合同责任和承诺

2019年11月，我们与Anacor签订了一项独家全球许可协议，涵盖了由Anacor控制用于治疗、诊断或预防疾病的特定化合物和其他知识产权。作为获得开发、制造和商业化指定化合物的世界范围内、可转让的独家权利和许可证，我们在2019年11月向Anacor支付了200万美元的预付款，并发行了Anacor公司我们的A系列可赎回可转换优先股。我们同意在实现各种开发里程碑时向Anacor支付进一步款项，最高总额为200万美元，实现各种商业和销售门槛里程碑时支付最高总额为12500万美元，以及依据特定转让安排收到的最高50%知识产权费用。知识产权费用受到某些惯例扣减的影响，包括缺乏专利覆盖和仿制品投放市场等。我们还同意按销售额的一定比例支付Anacor销售版税，比例范围从个位数到中位数。

我们与第三方合同机构在正常业务过程中签订合同，用于进行临床前和非临床研究以及临床试验，制造和供应我们用于运营目的的临床前、非临床、临床试验和其他服务和产品。这些合同通常规定在通知后一定期限内可以终止，因此我们认为这些协议下不可取消的义务并不重要。

最近的会计声明

请参阅本季度报告10-Q第I部分第1项中“最近采纳的会计准则”章节，位于“注释2——呈现基础和重要会计政策摘要”中的基本报表注释。

重要的会计政策、重大判断和估计的使用

根据普通会计准则编制财务报表及相关披露要求我们做出影响简明财务报表及附注中金额报告的判断、假设和估计。“注2—重大会计政策摘要”【基本报表】在我们截至2023年12月31日年度报告的基本报表中描述了编制财务报表所使用的重大会计政策和方法。我们的关键会计估计，截至我们年度报告表10-k第II部分第7项中“管理层讨论及分析财务状况和经营业绩”中确定的2023年12月31日年度，但不限于，对研发和股票补偿使用的估计进行了讨论。这些会计政策和估计要求在编制简明财务报表时使用重大的判断和假设，实际结果可能与报告的金额存在实质性差异。

JOBS法案会计选举

《工作机会法案》允许像我们这样的“新兴成长型企业”或“EGC”推迟采纳《工作机会法案》颁布后发布的新或修订的会计准则，直到这些准则适用于私营公司为止。我们选择利用这一延长的时间来遵守对公共和私人公司具有不同有效日期的新或修订会计准则，直至我们不再是新兴成长型企业，或者在《工作机会法案》规定的延长过渡期之前肯定且不可撤销地选择退出该延长过渡期。因此，我们提供的信息可能与遵守新或修订的会计准则的公司的信息不可比较。

此外，我们打算依靠《初创企业支持法案》提供的其他豁免，包括但不限于，不需要遵守《萨班斯-豪利法案》第404(b)条的审计人员验证要求。

在以下事件最早发生之前，我们将继续作为EGC：（1）我们首次财政年度的最后一天，年总收入超过12.35亿美元；（2）当我们符合“大型高速文件报告者”的条件，非关联方持有至少70000万美元的股权证券的日期；（3）在之前三年期间发行的非可转换债务证券超过10亿美元的日期；以及（4）在我们首次公开募股五周年之后的财政年度的最后一天。

项目1 控件3.市场风险的定量和定性披露。

利率灵敏度

我们面临与利率变动相关的市场风险。截至2024年9月30日，我们拥有9340万美元的现金、现金等价物和投资，主要包括货币市场基金和可交易证券，主要由投资级、短期和长期固收证券以及政府证券组成。

我们投资活动的主要目标是保护资本以支持我们的运营。我们还寻求在不承担重大风险的情况下最大化投资收入。为了实现我们的目标，我们按照董事会批准的投资政策，保持现金、现金等价物和投资的投资组合。

我们的投资面临利率期货风险，如果市场利率上升，其价值可能会下降。在所呈现的任何时段内，利率发生假设的10%相对变化不会对我们的基本报表产生实质影响。我们认为通货膨胀、利率变动或汇率波动未对我们任何呈现的时期的营运业绩产生显著影响。

外汇风险

我们的一小部分支出以外币计价。未来美元价值的波动可能会影响我们在美国境外支付的服务价格。在截至2024年9月30日的季度中，我们未面临重大外币风险。

通货膨胀的影响

通货膨胀通常通过提高我们的劳动成本和运营成本来影响我们，包括临床试验、非临床研究和制造业-半导体成本。我们认为，通货膨胀对本表格10-Q其他地方包含的我们未经审计的中期简明基本报表没有产生重大影响。

项目1 控件第四部分：管理和程序。

披露控件和程序的评估

我们的管理层，在我们的首席执行官（“CEO”）和致富金融(临时代码)官（“CFO”）的参与下，已评估了我们的披露控制和程序的有效性（如《1934年证券交易所法》修订条例13a-15(e)和15d-15(e)中定义的），截至本10-Q表格所涵盖期间结束时。

根据《交易法》第13a-15(e)和15d-15(e)条款定义的“披露控制和程序”一词是指公司为确保在其根据《交易法》提交或报告的文件中要求披露的信息被录入、处理、汇总和报告所设计的控制和其他程序，这些操作必须在SEC规则和表格指定的时间内完成。披露控制和程序包括但不限于确保要求披露的信息能够被收集并传达给公司的管理层（包括首席执行官和首席财务官）或执行类似职能的人员的控制和程序，以允许及时作出关于必要披露的决定。管理层认识到，任何控制和程序，无论设计和运作得多么好，仅能提供合理的保证，以达到其目标，管理层必然在评估可能的控制和程序的成本效益关系时运用其判断力。

我们的首席执行官和首席财务官已得出结论，截至2024年9月30日，由于在2023年12月31日结束的年度报告中之前披露的财务报告内部控制的重大缺陷，我们的披露控制和程序未能有效。

尽管发现了重大弱点，管理层（包括我们的CEO和CFO）已根据执行的程序认定，包含在这份第10-Q表格季度报告中的简化基本报表是按照美国通用会计准则编制的。

先前确定的财务报告内部控制方面的重大弱点

在准备2022年3月IPO的过程中，我们发现了公司财务报告的内部控制方面的实质性弱点。实质性弱点是指公司财务报告的内部控制中存在的缺陷，或缺陷的组合，使得公司的年度或中期财务报表可能发生重大错误的可能性无法及时被预防或发现。

已鉴定出的重大弱点如下，并且在2024年9月30日仍然存在：

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我们没有设计和维护一个与我们的财务报告要求相称的有效控制环境。具体来说，我们缺乏足够的资源，既没有适当水平的会计知识、经验和培训以及时、准确地分析、记录和披露会计事务，也没有足够的知识和经验来建立有效的流程和控制。此外，缺乏足够数量的专业人员导致我们无法持续建立适当的权限和职责，以实现我们的财务报告目标，例如在我们的财务和会计职能中职责分离不足。这一重大缺陷导致了以下其他重大缺陷的出现。

•

我们没有设计和维护与期末财务报告流程相关的有效控制措施，包括设计和维护正式的会计政策、程序和控制措施，以实现完整、准确和及时的财务会计、报告和披露。此外，我们也没有设计和维护对账单和分录准备及审查的控制措施，包括保持适当的职责分离。

上述重大缺陷导致对应计费用余额的调整，这些调整是在发布基本报表之前进行了，截止到2019年和2020年12月31日。此外，这些重大缺陷可能导致我们所有账户或披露的重大错误，从而在年度或中期基本报表中产生重大错误，这些错误无法被防止或发现。

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我们没有设计和维护有效的信息技术（“IT”）一般控制措施，以便为我们基本报表的编制提供相关的信息系统控制。具体来说，我们没有设计和维护（i）程序变更管理控制，以确保财务IT应用程序和基础会计记录影响的IT程序和数据变更被识别、测试、授权并适当实施，(ii) 用户访问控制，以确保适当的职务分离，并充分限制用户和特权访问财务应用程序、程序和数据，限制在适当的公司人员之间，(iii) 计算机操作控制，以确保关键批处理作业受到监控，数据备份得到授权和监控，以及 (iv) 程序开发的测试和批准控制，以确保新的软件开发与业务和IT要求对齐。

这些信息技术缺陷没有导致对基本报表的调整。然而，这些信息技术缺陷在汇总后可能会影响有效的职责分离，以及信息技术依赖控制的有效性（例如，自动化控制，处理对一个或多个断言的重大错误陈述风险，以及支持系统生成数据和报告有效性的信息技术控制和基础数据），这可能导致无法预防或检测的错误陈述，潜在影响所有基本报表账户和披露。因此，管理层已确定，汇总的信息技术缺陷构成重大缺陷。

财务报告内部控制的变化

在2024年9月30日结束的三个月内，未发生影响或可能对我们的财务报告内部控制有重大影响的交易所法案第13a-15(f)和15d-15(f)下定义的内部控制变化。

控制系统不管多么完善并运作良好，只能提供合理的保证而不是绝对的保证，控制系统的目标正在被实现。此外，任何控制系统的设计都必须反映出资源的限制，并且必须考虑所有控制的益处相对于其成本。由于所有控制系统的固有限制，在任何控制问题和欺诈实例被检测出之前，没有任何控制评估可以提供绝对保证。这些固有限制包括决策中的判断可能是错误的，也可能由于错误或疏忽而发生故障。控制系统也可能被某些人的个人行为所规避，被两个或多个人的勾结所规避，或被管理层对控制的修改所规避。任何控制系统的设计也基于某些关于未来事件发生可能性的假设，不能保证在所有可能的未来条件下任何设计都能成功实现其声明的目标。随着时间的推移，由于条件的变化或遵守政策或程序的程度恶化，控制可能变得不充分。

在设计和评估我们的披露控制和程序时，管理层认识到，无论装备有多好的控制和程序，都只能在合理的范围内提供实现所需控制目标的合理保障。此外，披露控制和程序的设计必须反映出存在资源约束和管理必须在评估可能的控制和程序的成本与收益之间进行判断的事实。

第二部分——其他R 信息

项目1 控件1. 法律诉讼。

第I部分，附注7 - 承诺和业务风险的信息已纳入参考。

项目1 控件第1A部分风险因素。

投资于我们的普通股涉及高度风险。在投资于我们的普通股之前，您应仔细考虑以下所述风险以及所有在本表格10-Q中包含的其他信息，包括我们的未经审计的基本报表和相关附注以及标题为“管理层对财务状况和经营业绩的讨论与分析”的部分。下文描述的任何事件或发展可能损害我们的业务、财务状况、经营业绩和增长前景。除非另有说明，这些风险因素中对我们业务可能受损的参考将包括对我们业务、声誉、财务状况、经营业绩和前景的损害。在此类事件中，我们的普通股市场价格可能下跌，您可能会损失全部或部分投资。我们目前不知道的其他风险和不确定因素，或我们目前认为不重要的因素，也可能损害我们的业务运营。

风险因素摘要

投资我们普通股涉及很高的风险，因为我们的业务受到许多风险和不确定性的影响，如下所述。使投资我们的普通股具有风险的主要因素和不确定性包括但不限于：

▪

我们是一家临床阶段的生物制药公司，运营历史有限，并且没有产品获得商业销售批准。自成立以来，我们已出现了重大亏损。我们预计在接下来的几年中将继续亏损，并且可能再也无法实现或维持盈利。

▪

我们可能无法实现最近业务重组和裁员所预期的好处，而且在实施过程中可能会产生额外成本或其他困难。

▪

我们需要大量额外的资金来满足我们的财务需求，并追求我们的业务目标。如果我们无法及时筹集资本，我们可能被迫推迟、减少或完全停止当前和未来的产品开发计划或未来的商业化努力。

▪

如果我们未能获得监管批准并成功商业化我们的产品候选，或者如果我们在这方面经历重大延迟，我们可能永远无法盈利。

▪

如果我们可能推进到临床试验的任何产品候选者的临床试验未能向美国食品药品监督管理局（“FDA”）或其他类似监管机构证明安全性、耐受性和/或有效性，或者未能产生有利结果，我们可能会承担额外成本或经历延迟，甚至最终无法完成这些产品候选者的开发和商业化。

▪

如果我们在临床试验中遇到延迟或困难，我们的临床发展活动和获得必要的监管批准可能会受阻或延迟。

▪

我们依赖单一来源的第三方进行我们的产品候选者的临床前和非临床研究、临床试验，以及临床试验材料的制造，而这些第三方可能无法令人满意地执行，包括未能按时完成这些研究、试验和制造服务，或未能遵守适用的监管要求。

▪

即使我们的任何产品候选者获得监管批准，它们也可能无法获得医疗社区中医生、患者、第三方支付者和其他人所需的市场认可，从而实现商业成功。如果我们无法建立销售、市场营销和分销能力，或与第三方签订销售、市场营销和分销协议，我们在产品候选者获得批准后，可能无法成功实现商业化。

▪

我们面临着巨大的竞争，这可能导致其他公司在我们之前或更成功地发现、开发或商业化产品。

▪

我们以小团队运作，未来的成功取决于我们保留关键高管和吸引、留住、激励合格人员的能力。

▪

我们发现了财务报告内部控制方面的重大缺陷。由于我们未能保持有效的财务报告内部控制，我们可能无法准确或及时地报告我们的财务状况或运营结果，这可能对我们的业务产生不利影响。

▪

我们开发和商业化某些科技以及某些产品候选者的权利在很大程度上取决于他人授予我们的许可条款和条件，包括乔治亚大学和辉瑞的全资子公司Anacor制药公司（“Anacor”）。如果我们未能遵守我们从第三方获得产品、科技或数据的许可证或收购协议中的义务，我们可能会失去这些权利。

▪

如果我们无法取得和维持对我们的技术或产品候选药物的专利和其他知识产权保护，或者获得的专利和其他知识产权保护范围不够广泛，竞争对手可能会开发和商业化类似或相同于我们的技术和药物，我们成功商业化我们的技术和产品候选药物的能力可能会受到影响。

▪

如果我们无法获得或者在获得所需的监管批准方面出现延迟，我们将无法商业化我们的产品候选药物，这将严重影响我们产生营业收入的能力。

▪

未来立法和/或FDA或相应监管机构采纳的法规和政策，可能会增加我们进行和完成临床试验所需的时间和成本。

▪

我们普通股的交易价格可能会波动。

与我们的财务状况和资本需求有关的风险

我们是一家临床阶段的生物制药公司，运营历史有限，且没有获得商业销售批准的产品。自创立以来，我们已经遭受了重大损失。我们预计在接下来的几年中将继续亏损，可能永远无法实现或维持盈利。

生物制药产品的开发是一项高度投机的工作，并涉及到相当大程度的风险。我们是一家处于临床阶段的生物制药公司，业务历史有限，您无法评估我们的业务和前景。目前我们没有获得任何产品的商业销售批准，也没有从产品销售中产生任何营业收入，并自2017年成立以来每年都亏损。此外，作为一家公司，我们经验有限，尚未证明具有成功克服新兴领域中公司经常遇到的许多风险和不确定性的能力，特别是在生物制药行业。

在2024年8月，我们宣布了评估我们初始产品候选药物epetraborole在治疗抵抗性MAC肺病患者中的2/3期临床试验的2期部分的顶线数据。虽然该研究的2期部分在展示一种新的患者报告结果（PRO）工具的潜在有效性和epetraborole + OBR组（39.5%）与安慰剂 + OBR组（25.0%；治疗差异13.9%，p=0.19）中更高的基于PRO的临床响应率方面达到了主要目标，但第6个月的痰培养转阴这一关键次要终点在治疗组间是相似的（epetraborole + OBR组为13.2%，安慰剂 + OBR组为10.0%；治疗差异3.4%，p=0.64）。考虑到这些结果，我们决定结束试验。尽管持续的数据审查表明在该指征中继续开发的潜力，但在完成审查或与FDA讨论后，我们可能会判断推迟或中止开发。

截至2023年12月31日，我们的净损失为6470万美元；截至2024年9月30日和2023年9月30日，净损失分别为4380万美元和4780万美元。截止到2024年9月30日，我们累计赤字为19830万美元。到目前为止，我们的运营资金主要来自于我们的承销发行（“承销发行”）、我们的市场报价股票发行计划（“ATm发行”）、我们的首次公开募股（IPO）以及我们可赎回优先股的出售。我们将几乎所有的财务资源和精力投入到研发中，包括临床前研究、非临床研究、制造业-半导体、临床试验以及与我们运营相关的一般和行政成本。我们预计在未来几年内将继续产生大量的费用和运营损失。我们的净损失可能会在季度和年度之间显著波动。

我们预计随着以下行动，我们的费用将大幅增加：

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继续推进我们产品候选品的正在进行和计划中的临床前和非临床发展；

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展开对我们未来可能开展的产品候选者进行临床前和非临床研究以及临床试验;

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寻求发现和开发未来的产品候选者；

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寻求监管批准，以便对任何成功完成临床试验的候选药品进行审批

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最终建立销售、市场营销和分销制造行业，并加大外部制造业-半导体能力，如果我们进入后期临床试验，并寻求商业化任何我们可能获得监管批准并打算自行商业化的产品候选者；

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维护、扩展并保护我们的知识产权组合；

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聘请额外的临床、科学、化学、制造业-半导体和控制人员；

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添加运营、财务、管理和合规信息系统及人员，包括支持我们产品开发和未来商业化努力的人员;

•

产生法律、会计、信息系统等与作为一家上市公司运营相关的费用。

为了变得并保持盈利，我们必须成功地开发并最终商业化能够产生重要营业收入的药物。这将需要我们在一系列具有挑战性的活动中取得成功，包括完成产品候选者的临床前和非临床研究以及临床试验，获得监管批准，制造、营销和销售获得监管批准的任何产品，以及发现和开发额外的产品候选者。我们只在大多数这些活动的初级阶段。我们可能永远也无法在这些活动中取得成功，即使我们成功了，也可能无法产生足够重要的营业收入来实现盈利。

由于与药物开发相关的众多风险和不确定性，我们无法准确预测费用的时间或金额，以及我们何时或是否能够实现盈利。如果监管机构要求我们进行除了目前预期的研究以外的其他研究，或者我们的临床试验或任何产品候选者的开发出现进一步的延迟，我们的费用可能会增加。

即使我们实现盈利，也可能无法在季度或年度基础上维持或增加盈利。我们未能实现盈利或继续保持盈利可能会抑制我们普通股的价值，并且会影响我们筹集资本、拓展业务、维持研发工作或继续经营的能力。我公司普通股价值下降也可能导致您失去全部或部分投资。

我们有限的经营历史可能会让您难以评估我们业务至今的成功，并评估我们未来的生存能力。

我们于2019年11月开始积极运营，到目前为止，我们的运营主要集中在筹集资金、开发epetraborole、拓宽我们在epetraborole开发方面的专业知识、进行临床前和非临床研究、制造临床试验材料、准备和启动临床试验，以及一般和行政运营。作为一家公司，我们尚未展现出成功完成关键临床试验、获得监管批准、制造商业产品或安排第三方代表我们进行这些工作的能力，或进行成功商业化所需的销售和营销活动。因此，您对我们未来成功或生存能力的任何预测可能不如我们拥有更长运营历史时那样准确。

我们面临并可能遇到意想不到的费用、困难、复杂性、延误及其他已知或未知因素，这些因素可能影响我们实现业务目标。例如，在2024年8月，我们宣布了评估我们初始产品候选药物epetraborole在治疗难治性MAC肺病患者中进行的2/3期临床试验的第2阶段的顶线数据。尽管该研究的第2阶段达成了其主要目标，展示了一种新型患者报告结局(PRO)工具的潜在验证，以及epetraborole + OBR组的PRO基础临床反应率高于安慰剂 + OBR组(39.5% 对 25.0%；治疗差异 13.9%，p=0.19)，但在第6个月的痰培养转阴这一关键次要终点，治疗组之间的结果相似（epetraborole + OBR组为13.2%，而安慰剂 + OBR组为10.0%；治疗差异3.4%，p=0.64）。鉴于这些结果，我们决定终止该试验，目前正在审查试验数据以判断下一步措施。

此外，我们需要在某个时候成功地从一个注重研发的公司转变为一个能够支持商业活动的公司。我们可能在这样的转型中并不成功。

我们预计由于多种因素，许多因素超出了我们的控制，我们的财务控件和经营结果将继续在季度和年度之间显著波动。因此，您不应将任何季度或年度期间的结果作为未来经营业绩的指示。

我们可能无法实现最近业务重组和裁员所预期的好处，而且在实施过程中可能会产生额外成本或其他困难。

2024年8月，我们宣布了一项业务重组计划，并实施了裁员措施。这些举措的目的是将组织和资源集中在用于治疗恙虫病、NTM、痈疽病、其他传染病和肿瘤的候选药物和开发化合物上。我们认为这些变化是必要的，以便简化我们的组织结构，并基于我们第2期临床试验评估我们初始候选药物epetraborole在治疗难治性MAC肺病患者中的顶线结果的结果，以及我们决定停止针对该难治性患者群体的epetraborole开发工作。

然而，我们的业务策略变化和裁员可能会产生意想不到的后果和成本，例如机构知识和专业技能的丧失，超出我们预期的员工流失，剩余员工士气的降低，以及我们可能无法实现预期收益的风险，所有这些都可能对我们的开发活动、产品候选开发进展能力和经营成果或财务控件产生不利影响。由于裁员，我们已为截至2024年9月30日的三个月和九个月确认了220万美元的遣散费和其他费用，主要包括遣散支付和其他相关的员工解雇费用。

我们可能会承担其他费用、成本、未来现金支出或损失，这些并未当前考虑，是由于可能发生的事件而导致的，或与修订后的业务策略和人员减少有关。此外，我们可能无法成功地将离职员工的职责和义务分配给留任的员工。

我们还可能发现，裁员和成本削减措施将使我们难以开拓新的机会和项目，并要求我们雇佣合格的替代人员，这可能需要我们承担额外的意料之外的成本和费用。此外，并不能保证我们将成功实现我们的任何新目标。我们未能成功完成以上任何活动和目标可能会对我们的业务、财务状况、运营结果和增长前景产生负面影响。

我们需要大量额外资金以满足我们的财务需求并追求我们的业务目标。如果我们无法在需要时筹集资金，我们可能被迫推迟、减少或完全停止我们当前和未来的产品开发计划或未来的商业化努力。

我们相信我们目前的现金、现金等价物和投资将为我们至少未来12个月内的营业费用和资本支出需求提供资金。然而，与我们持续的经营和计划活动相关，我们需要获得大量额外资金。我们未来的资本需求将取决于许多因素，包括：

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the timing, progress, and results of our ongoing and future clinical trials of our product candidates;

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the costs, timing and outcome of regulatory review of any of our product candidates that may complete clinical development;

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the scope, progress, results and costs of identifying, obtaining, and conducting preclinical development, laboratory testing and clinical trials of future product candidates that we may pursue;

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the cost and timetable of manufacturing processes for development, clinical trials and potential commercial use;

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the number and development requirements of future product candidates that we may pursue;

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the amount of funding that we receive under our non-dilutive funding opportunities, including government awards that we may apply for;

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the costs and timing of future commercialization activities, including product manufacturing, marketing, sales, and distribution, for any product candidates that receive regulatory approval;

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the pricing and revenue, if any, received from commercial sales of any product candidates that receive regulatory approval;

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the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending any intellectual property-related claims;

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the costs of operating as a public company; and

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the extent to which we acquire or in-license other product candidates and technologies.

Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of drugs that we do not expect to be commercially available for several years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or altogether cease our research and development programs or any future commercialization efforts.

Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or to any of our product candidates.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings and debt financings. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or any product candidates, or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our development of our product candidates or future commercialization efforts or grant rights to a third party to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

We have a contractual commitment to develop epetraborole for global health initiatives, which may affect our ability to develop and commercialize epetraborole in certain countries and may impact our intellectual property rights. Our strategy for our global health initiatives depends on receiving non-dilutive funding, and we as a company have limited experience with this strategy.

Under our Global Health Agreement with Adjuvant, we have a contractual commitment to use reasonably diligent endeavors to develop epetraborole and any other mutually agreed-upon products for melioidosis, tuberculosis, and other indications for at-risk developing countries at accessible pricing and at reasonable volume, including selling epetraborole and any other mutually agreed-upon products in certain target countries at or slightly above the cost of sales, so long as we do not sell products at a loss. Under the Global Health Agreement, we made certain commitments to develop epetraborole and any other mutually agreed-upon products and to pursue regulatory strategies and product registrations. If we do not maintain compliance with these and other program-related global access commitments under the Global Health Agreement, Adjuvant may be entitled to repayment for any portion of its investment that is not used for the purposes outlined in the Global Health Agreement. Our obligations under the Global Health Agreement may affect our ability to commercialize epetraborole in certain countries.

Our strategy for developing epetraborole for global health initiatives depends on receiving non-dilutive funding from sources such as public and private agencies and foundations. We, as a company, have limited experience with non-dilutive funding, and we may not be able to obtain additional non-dilutive funding to support our needs to fund our global health initiatives. For example, we cannot be certain that there will be additional awards, contracts, grants or funding sources or solicitations available to support our development efforts, that our other grant applications and funding proposals will be successful, or that we will be able to continue satisfying the award criteria of the NIAID contract award or any grants or funding awarded to us. If we fail to receive additional non-dilutive funding, progress in our global health initiatives may be impaired or delayed.

Risks Related to the Development of Our Product Candidates

If we do not obtain regulatory approval for and successfully commercialize any of our product candidates, or if we experience significant delays in doing so, we may never become profitable.

We currently have no products approved for sale and have historically invested a significant portion of our efforts and financial resources on the development of our initial product candidate, epetraborole, as a treatment for treatment-refractory MAC lung disease. Although we have now discontinued our development efforts with respect to epetraborole in the treatment-refractory MAC population studied in the EBO-301 trial, our business remains heavily dependent on the successful development, regulatory approval, and, if approved, commercialization of our product candidates. We cannot be certain that any product candidate will receive regulatory approval or will be successfully commercialized even if it receives regulatory approval. The research, development, manufacturing, safety, efficacy, labeling, approval, sale, marketing and distribution of our product candidates are, and will remain, subject to comprehensive regulation by the FDA and other comparable foreign regulatory authorities.

Before obtaining regulatory approvals for the commercial sale of any product candidates, we must demonstrate through preclinical and nonclinical studies and clinical trials that the product candidate is safe and effective for use in each target indication. Drug development is a long, expensive and uncertain process, and delay or failure can occur at any stage during our nonclinical studies, clinical trials or drug product manufacturing process. These delays or failures could be caused by a variety of factors, including but not limited to, toxicity, safety, tolerability, efficacy, problems with clinical trial enrollment, drug product availability, stability, and impurity issues related to drug product manufacturing. For example, in August 2024, we announced topline data from the Phase 2 portion of our Phase 2/3 clinical trial evaluating epetraborole in patients with treatment-refractory MAC lung disease. Although the Phase 2 part of the study met its primary objective in demonstrating the potential validation of a novel patient-reported outcome (PRO) tool and a higher PRO-based clinical response rate in the epetraborole + OBR arm (39.5%) vs. placebo + OBR (25.0%; treatment difference 13.9%, p=0.19), sputum culture conversion at Month 6, a key secondary endpoint, was similar between treatment arms (13.2% in epetraborole + OBR vs. 10.0% placebo + OBR; treatment difference 3.4%, p=0.64). Given these results, we decided to close out the trial and commence a review of data to help inform further development. Although that ongoing data review has to date indicated the potential to continue development in this indication, it is possible that we will determine after completion of the review or discussions with FDA to defer or discontinue development of epetraborole in NTM.

Failure to obtain regulatory approval for our product candidates in the United States or other territories will prevent us from commercializing and marketing such product candidates. The success of our product candidates will depend on several additional factors, including:

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successful and timely completion of preclinical and nonclinical studies and requisite clinical trials;

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performing preclinical studies and clinical trials in compliance with the FDA or any comparable regulatory authority requirements;

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receipt of regulatory approvals from applicable regulatory authorities;

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the ability to manufacture sufficient quantity of product for development, clinical trials or potential commercialization;

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obtaining regulatory approvals with labeling for sufficiently broad patient populations and indications, without unduly restrictive distribution limitations or safety warnings, such as black box warnings or a Risk Evaluation and Mitigation Strategies (“REMS”) program;

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obtaining and maintaining patent, trademark and trade secret protection, and regulatory exclusivity for our product candidates;

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making and retaining sufficient and reliable arrangements with third parties for manufacturing capabilities;

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launching commercial sales of products, if and when approved;

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acceptance of our therapies, if and when approved, by physicians, patients and third-party payors;

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competing effectively with other therapies;

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obtaining and maintaining healthcare coverage and adequate reimbursement from third-party payors;

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maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trademarks, trade secrets and know-how;

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avoiding and defending against third-party infringement, misappropriation or other violation of intellectual property claims;

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maintaining a continued acceptable safety and tolerability profile of our drugs following approval; and

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allowance to proceed with clinical trials under future investigational new drug applications (“INDs”), or under comparable applications submitted outside the United States.

If we do not achieve these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize our product candidates, which would harm our business.

We may not be successful in our efforts to build a pipeline of product candidates.

A key element of our strategy is to develop our AN2 drug discovery platform, build a pipeline of product candidates and progress these product candidates through clinical development for the treatment of Chagas disease, NTM, melioidosis, other infectious diseases, and in oncology. We may not be able to develop product candidates that are safe and effective for any proposed use. Even if we are successful in continuing to build our pipeline, the potential product candidates that we identify may not be suitable for clinical development, as a result of significant safety, tolerability and other negative characteristics or limitations that may prevent successful regulatory approval or limit market acceptance or reimbursements from third-party payors. If we do not successfully develop and commercialize any of our product candidates, we will not be able to obtain product revenue in future periods, which could significantly harm our financial position and adversely affect the trading price of our common stock.

There can be no assurance that the clinical trials we conduct will be sufficient for product approval.

Prior to marketing any product candidate in the United States, we must demonstrate that such product candidate is safe and provide substantial evidence of effectiveness for its intended uses. The FDA has generally interpreted the “substantial evidence” requirements as requiring sponsors to conduct two adequate and well-controlled Phase 3 clinical trials. However, in some circumstances, the FDA may conclude that substantial evidence of efficacy has been demonstrated through the conduct of one adequate and well-controlled clinical trial, plus confirmatory evidence (whether obtained prior to or after such trial). Regardless of the clinical development plans we decide to pursue with respect to our product candidates, there can be no assurance that the FDA will not require additional clinical trials for approval of such product candidates beyond the trials that we currently plan to conduct, even if we successfully complete the trial and believe the results are sufficiently positive.

As a company, we have limited experience designing and conducting clinical trials in the United States or other geographies and may be unable to design and execute a clinical trial to support regulatory approval. In addition, the design and results of our clinical trials may not be sufficient to support approval, since factors such as an inappropriate dosage or flaws in the design of a clinical trial may not become apparent until the clinical trial is in progress or data are available.

There is a high failure rate for product candidates proceeding through clinical trials. Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in later-stage clinical trials even after achieving promising results in preclinical testing and earlier-stage clinical trials. For example, in August 2024, we announced topline data from the Phase 2 portion of our Phase 2/3 clinical trial evaluating epetraborole in patients with treatment-refractory MAC lung disease. Although the Phase 2 part of the study met its primary objective in demonstrating the potential validation of a novel patient-reported outcome (PRO) tool and a higher PRO-based clinical response rate in the epetraborole + OBR arm (39.5%) vs. placebo + OBR (25.0%; treatment difference 13.9%, p=0.19), sputum culture conversion at Month 6, a key secondary endpoint, was similar between treatment arms (13.2% in epetraborole + OBR vs. 10.0% placebo + OBR; treatment difference 3.4%, p=0.64). Given these results, we decided to close out the trial and commence a review of data to help inform further development. Although that ongoing data review has to date indicated the potential to continue development in this indication, it is possible that we will determine after completion of the review or discussions with FDA to defer or discontinue development of epetraborole in NTM.

If clinical trials of our product candidates fail to demonstrate safety and/or efficacy of such product candidates to the satisfaction of the FDA or other comparable regulatory authorities, or do not otherwise produce favorable results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.

We may not commercialize, market, promote, or sell any product candidate without obtaining regulatory approval from the FDA or other comparable regulatory authorities, and we may never receive such approvals. It is impossible to predict when or if any of our product candidates will be deemed effective or safe in humans and receive regulatory approval. Before obtaining regulatory approval from regulatory authorities for the sale of any of our product candidates, we must complete preclinical and nonclinical development and conduct extensive clinical trials to demonstrate the safety and efficacy of such product candidates in humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete, and is uncertain as to outcome. A failure of one or more clinical trials can occur at any stage of testing. Moreover, preclinical, nonclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical and nonclinical studies and clinical trials have nonetheless failed to obtain regulatory approval of their products. In addition, before we can initiate clinical trials for any product candidates, we must submit the results of preclinical studies to the FDA or comparable foreign regulatory authorities along with other information, including information about product candidate chemistry, manufacturing and controls and our proposed clinical trial protocol, as part of an IND or similar regulatory submission. The FDA or comparable foreign regulatory authorities may require us to conduct additional preclinical studies for any product candidate before it allows us to initiate clinical trials under any IND or similar regulatory submission, which may lead to delays and increase the costs of our preclinical development programs.

We may experience numerous unforeseen events prior to, during, or as a result of, clinical trials that could delay or prevent our ability to receive regulatory approval or commercialize any of our product candidates, including, but not limited to:

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we may be unable to generate sufficient preclinical, toxicology or other in vivo or in vitro data to support the initiation or continuation of clinical trials;

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the FDA or other comparable regulatory authorities may disagree as to the design or implementation of our clinical trials, including the selection of primary and secondary endpoints, which may result in changes to our planned clinical trial design and potential target clinical outcomes, or may result in failure to obtain approval altogether;

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regulators, institutional review boards (“IRBs”), or ethics committees may not allow or authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;

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we may not reach agreement on acceptable terms with prospective contract research organizations (“CROs”), and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites;

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we may experience delays in identifying, recruiting and training suitable clinical investigators;

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regulators may issue a clinical hold, or regulators or institutional review boards may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks;

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we may make changes or amendments to a trial protocol;

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we may select endpoints that require prolonged periods of clinical observation or require extended analysis of the resulting data;

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clinical trial sites may deviate from the trial protocol or drop out of a trial;

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clinical trials for our product candidates may produce negative or inconclusive results;

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we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;

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enrollment in clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate, we may fail to recruit suitable patients to participate in a trial, or the number of patients required for clinical trials of our product candidates may be larger than we anticipate;

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our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

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we may lack adequate funding to complete a clinical trial, or the cost of clinical trials of our product candidates may be greater than we anticipate;

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the FDA or other comparable regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with whom we enter into agreements for clinical and commercial supplies;

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the supply or quality of our product candidates or other materials necessary to conduct clinical trials of such product candidates may be insufficient or inadequate;

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serious adverse events may occur in trials of the same class of agents conducted by other companies that could be considered similar to our product candidates;

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our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or IRBs to suspend or terminate the clinical trials; and

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the approval policies or regulations of the FDA or other comparable regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

If we are required to conduct additional clinical trials or other testing of any of our product candidates beyond the studies that we currently contemplate, if we are unable to successfully complete clinical trials or other testing of our product candidates, or if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns observed in these trials or tests, we may:

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be delayed in obtaining regulatory approval for our product candidates;

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not obtain regulatory approval at all;

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obtain approval for indications or patient populations that are not as broad as intended or desired;

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obtain approval with labeling that includes significant use or distribution restrictions or safety warnings, such as black box warnings or a REMS program;

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be subject to additional post-marketing testing requirements; or

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be required to remove the product from the market after obtaining regulatory approval.

We do not know whether any of our preclinical and nonclinical studies or clinical trials will begin as planned, will need to be restructured, or will be completed on schedule or at all. Significant preclinical and nonclinical study or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates. In addition, many of the factors that cause, or lead to, delays of clinical trials may ultimately lead to the denial of regulatory approval of our product candidates.

We cannot predict whether or when bacteria may develop resistance to any of our antibacterial product candidates, which could affect the revenue potential of our product candidates.

We are developing certain of our product candidates to treat bacterial infections. The bacteria responsible for these infections evolve quickly and may develop antibiotic resistance caused by spontaneous mutations in the genes encoding the cellular target of the antibiotic. In some cases, resistance mechanisms can be transferred within and between bacterial species. Prescription or use of our product candidates, if approved, could depend on the type and rate of resistance of the targeted bacteria. Although we do intend to analyze the potential of emergence of resistance to our product candidates and only select those that we believe have low resistance potential, we cannot predict whether or when bacterial resistance may develop. Such bacterial resistances, if and when identified, could adversely affect the conduct or results of our clinical trials, and could adversely affect the market potential of the product candidate, if approved. The growth of drug-resistant infections in community settings or in countries with poor public health infrastructures, or the potential use of any product candidates outside of controlled hospital settings, could contribute to the rise of resistance.

Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial potential, or result in significant negative consequences following any potential regulatory approval.

Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. Undesirable side effects caused by our product candidates, whether used alone on in combination with other therapies, could cause us or regulatory authorities to interrupt, delay or halt clinical trials or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities, or, if such product candidates are approved, result in a more restrictive label and other post-approval requirements. Any treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial, or could result in potential product liability claims. Any of these occurrences may harm our business, financial condition, results of operations and growth prospects significantly.

Additional adverse events may emerge (along with additional data further defining previously identified risks) in any ongoing or subsequent clinical trials and there may be unforeseen serious adverse events or side effects that differ from those seen in studies completed to date. It is possible that as we test our product candidates in larger, longer and more extensive clinical programs, or as use of such product candidates becomes more widespread, if they receive regulatory approval, subjects will report illnesses, injuries, discomforts and other adverse events that were not observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials. Many times, side effects are only detectable after investigational drugs are tested in large-scale clinical trials or, in some cases, after they are made available to patients on a commercial scale after approval. If additional clinical experience indicates that any of our product candidates has unexpected side effects or causes serious or life-threatening side effects, the development of the product candidate may fail or be delayed, or, if the product candidate has received regulatory approval, such approval may be revoked, which would harm our business.

Even if we believe our product candidates demonstrate clinical efficacy, any unacceptable adverse side effects or toxicities, when administered in the presence of other pharmaceutical products, which can arise at any stage of development, may outweigh potential benefits. We may observe adverse or significant adverse events or drug-drug interactions in future preclinical studies or clinical trial candidates, which could result in the delay or termination of development, prevent regulatory approval or limit market acceptance if ultimately approved.

Moreover, if we elect, or are required, to delay, suspend or terminate any clinical trial of any of our product candidates, the commercial prospects of such product candidate may be harmed and our ability to generate revenue through its sale may be delayed or eliminated. Any of these occurrences may significantly harm our business.

Additionally, if any of our product candidates receive regulatory approval, regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication, or the adoption of a REMS program to ensure that the benefits outweigh its risks, which may include, among other things, a medication guide outlining the risks of the drug for distribution to patients and a communication plan to health care practitioners. Furthermore, if we or others later identify undesirable side effects caused by any product candidates, several potentially significant negative consequences could result, including:

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regulatory authorities may suspend or withdraw approvals of such product candidate, or we may decide to suspend marketing or remove a product from the marketplace;

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regulatory authorities may require additional warnings on the label or impose distribution or use restrictions;

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we may be required to change the way a product candidate is administered or conduct additional clinical trials, including one or more post-marketing research studies;

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we could be sued and held liable for harm caused to patients;

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we may be required to implement REMS, including the creation of a medication guide outlining the risks of such side effects for distribution to patients;

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we could be subject to fines, injunctions or the imposition of criminal or civil penalties;

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we may need to conduct a recall or comparable post-marketing action; and

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our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of the affected product candidate, if approved, or could substantially increase commercialization costs and expenses, which could delay or prevent us from generating revenue from the sale of our product candidates and harm our business and results of operations.

If we are not successful in discovering, developing and commercializing additional product candidates, our ability to expand our business and achieve our strategic objectives would be impaired.

Although a substantial amount of our effort will focus on potential clinical testing and potential regulatory approval of our current and future product candidates, including the development of AN2-502998, a boron-based small molecule therapeutic candidate for the treatment of Chagas disease, epetraborole for NTM or melioidosis, and other development compounds, an element of our strategy is to discover, develop and commercialize a portfolio of product candidates to treat diseases with high unmet need. We are seeking to do so by utilizing our targeted-design AN2 drug discovery platform, which uses bacterial genomics and state-of-the-art molecular and dynamic models to design active new compounds that target known mechanisms. We focus our clinical development on pathogens, drug targets, and patients with high, unmet medical needs to leverage the development and regulatory paths available for first-in-class or best-in-class therapeutics. Research efforts to identify and develop product candidates require substantial technical, financial, and human resources, whether or not any product candidates are ultimately identified. Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for many reasons, including the following:

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the research methodology used may not be successful in identifying potential product candidates;

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competitors may develop alternatives that render our product candidates obsolete or less attractive;

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product candidates we develop may nevertheless be covered by third parties’ patents or other exclusive rights;

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a product candidate may on further study be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria;

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a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all;

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a product candidate may not be accepted as safe, tolerable and effective by patients, the medical community or third-party payors, if applicable; and

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the FDA or other regulatory authorities may not approve or agree with the intended use of a new product candidate.

If we fail to develop and successfully commercialize our product candidates, our business and future prospects may be harmed and our business will be more vulnerable to any problems that we encounter in developing and commercializing our product candidates.

If we experience delays or difficulties in the enrollment of patients in clinical trials, our clinical development activities and receipt of necessary regulatory approvals could be delayed or prevented.

Patient enrollment is a significant factor in the timing of clinical trials, and the timing of our clinical trials will depend, in part, on the speed at which we can recruit patients to participate in our trials, as well as completion of required follow-up periods. We may not be able to initiate, continue or complete clinical trials of any product candidates that we develop if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials, as required by the FDA or other comparable regulatory authorities. We have limited experience enrolling patients in our clinical trials and cannot predict how successful we will be in enrolling patients in future clinical trials.

Patient enrollment is also affected by other factors including:

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the size and nature of the targeted patient population;

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the severity of the disease under investigation;

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the proximity and availability of clinical trial sites for prospective patients;

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the eligibility criteria for participation in the clinical trial;

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the design of the clinical trial;

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the perceived risks and benefits of the product candidate under study;

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our ability to recruit clinical trial investigators with appropriate experience;

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efforts to facility timely enrollment in clinical trials;

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the availability and efficacy of drugs approved to treat the diseases under study;

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the patient referral practices of physicians;

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our ability to obtain and maintain patient consents;

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the ability to monitor patients adequately during and after treatment; and

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the risk that patients enrolled in clinical trials will drop out of the trials before completion.

In particular, we may face delays and difficulties in enrollment in our planned trials of certain of our product candidates because Chagas disease and certain other conditions we may target include rare diseases (i.e., the size of the targeted patient population is small). Because of this, we may experience difficulties in recruiting sufficient patients into certain of our planned clinical trials.

Additionally, other pharmaceutical companies and research institutions targeting these same diseases are recruiting clinical trial patients from these patient populations, which may make it more difficult to fully enroll any clinical trials. We also rely on, and will continue to rely on, CROs and clinical trial sites to ensure proper and timely conduct of our clinical trials and preclinical studies. Though we have entered into agreements governing their services, we will have limited influence over their actual performance. Our inability to enroll a sufficient number of patients for clinical trials would result in significant delays and could require us to abandon one or more clinical trials altogether. We have experienced enrollment delays in the past. Enrollment delays in these clinical trials may result in further increased development costs for our product candidates, which would reduce the capital we have available to support our current and future product candidates and may result in our need to raise additional capital earlier than planned and could cause the value of our common stock to decline and limit our ability to obtain additional financing.

We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or have a greater likelihood of success.

Because we have limited financial and management resources, we focus on research programs and product candidates that we identify for specific indications. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial drugs or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing, or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.

Interim “topline” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publicly disclose interim, topline or preliminary data from our clinical trials and preclinical studies, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the interim, topline or preliminary results that we report may differ from future results of the same studies or trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Topline and preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the topline or preliminary data we previously published. As a result, topline and preliminary data should be viewed with caution until the final data are available.

Interim data from clinical trials that we may complete are further subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Adverse differences between interim, topline or preliminary data and final data could significantly harm our business prospects. Further, disclosure of such data by us or by our competitors could result in volatility in the price of our common stock.

Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product candidate or our business. If the interim, topline or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, financial condition, operating results, growth prospects.

We may conduct clinical trials for our product candidates outside of the United States, and the FDA may not accept data from such trials, in which case our development plans may be delayed, which could materially harm our business.

We conduct and may in the future conduct one or more of our clinical trials or a portion of our clinical trials for our product candidates outside the United States. The acceptance of study data from clinical trials conducted outside the United States or another jurisdiction by the FDA or comparable foreign regulatory authority may be subject to certain conditions or may not be accepted at all. In cases where data from foreign clinical trials are intended to serve as the sole basis for regulatory approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice; (ii) the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations; and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means. In addition, even where the foreign study data are not intended to serve as the sole basis for approval, the FDA will not accept the data as support for an application for regulatory approval unless the study is well-designed and well-conducted in accordance with GCP requirements and the FDA is able to validate the data from the study through an onsite inspection if deemed necessary. Many foreign regulatory authorities have similar requirements for clinical data gathered outside of their respective jurisdictions. In addition, such foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted. There can be no assurance that the FDA or any comparable foreign regulatory authority will accept data from trials conducted outside of the U.S. or the relevant jurisdiction. If the FDA or any comparable foreign regulatory authority does not accept such data, it may result in the need for additional trials, which could be costly and time-consuming, and which may result in current or future product candidates that we may develop not receiving approval for commercialization in the applicable jurisdiction.

Risks Related to Our Dependence on Third Parties

We rely on third parties to conduct our preclinical and nonclinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties, comply with applicable regulatory requirements or meet expected deadlines, our development programs and our ability to seek or obtain regulatory approval for or commercialize our product candidates may be delayed.

We are dependent on third parties to conduct our clinical trials, nonclinical studies and preclinical studies. Specifically, we have engaged CROs and consultants to conduct our ongoing and planned preclinical and nonclinical studies and clinical trials, in each case in accordance with trial protocols and regulatory requirements. We also expect to engage CROs for any of our other product candidates that may progress to clinical development. We expect to rely on CROs, as well as other third parties, such as clinical data management organizations, medical institutions, and clinical investigators, to conduct those preclinical and nonclinical studies, clinical trials, and manufacture of our clinical trial material. Currently, we rely on single source third-party research institutions, laboratories, clinical research and manufacturing organizations for research and development. Agreements with such third parties might terminate for a variety of reasons, including a failure to perform by the third parties. If we need to enter into alternative arrangements, or fail to enter into alternative arrangements in a timely manner, our product development activities would be delayed.

Our reliance on these third parties for research and development activities will reduce our control over these activities but will not relieve us of our responsibilities. For example, we will remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. Moreover, we and our CROs are required to comply with regulations and comply with good laboratory practice requirements for the conduct of certain preclinical studies and GCP requirements for clinical trials, which are regulations and guidelines enforced by the FDA, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. Similar regulatory requirements apply outside the United States, including the International Council for Harmonisation of Technical Requirements for the Registration of Pharmaceuticals for Human Use. Regulatory authorities enforce GCPs through periodic inspections of trial sponsors, principal investigators and trial sites. Failure to comply with these requirements by us or by third parties can result in FDA refusal to approve applications based on the clinical data, enforcement actions, adverse publicity and civil and criminal sanctions.

There is no guarantee that any of our CROs, investigators or other third parties will devote adequate time and resources to such trials or studies or perform as contractually required. If any of these third parties fails to meet expected deadlines, adhere to our clinical protocols or meet regulatory requirements, or otherwise perform in a substandard manner, our clinical trials may be extended, delayed or terminated. Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors. If these third parties do not successfully carry out their contractual duties, meet expected deadlines, or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, regulatory approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize such product candidates.

In addition, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and may receive cash compensation in connection with such services. If these relationships and any related compensation result in perceived or actual conflicts of interest, or the FDA concludes that the financial relationship may have affected the interpretation of the trial, the integrity of the data generated at the applicable clinical trial site may be questioned and the utility of the clinical trial itself may be jeopardized, which could result in the delay or rejection by the FDA of any NDA we submit. Any such delay or rejection could prevent us from commercializing our product candidates.

We also expect to rely on other third parties to store and distribute product supplies for our clinical trials. Any performance failure or regulatory noncompliance on the part of our distributors could delay clinical development or regulatory approval of our product candidates or commercialization of such product candidates, resulting in additional losses and depriving us of potential product revenue.

Our reliance on single-sourced third parties to manufacture our product candidates increases the risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

We do not own or operate manufacturing facilities for the production of clinical or commercial supplies of the product candidates that we are developing or evaluating, nor are we contemplating plans to do so. We have limited personnel with experience in drug manufacturing and lack the resources and the capabilities to manufacture any of our product candidates on a clinical or commercial scale. Our strategy is to continue to outsource all manufacturing of our product candidates and approved products, if any, to third parties.

In order to conduct clinical trials of our product candidates and prepare for commercialization, we will need to identify suitable manufacturers with the capabilities to manufacture our compounds in large quantities in a manner consistent with existing regulations. Our current and future third-party manufacturers may be unable to successfully increase the manufacturing capacity for any of our product candidates in a timely or cost-effective manner, or at all. In addition, quality issues may arise during scale-up activities at any other time. If our manufacturers are unable to successfully scale up the manufacture of our current or future product candidates in sufficient quality and quantity, the development, testing and clinical trials of that product candidate may be delayed or infeasible, and regulatory approval or commercial launch of that product candidate may be delayed or not obtained, which could significantly harm our business.

We do not currently have any agreements with third-party manufacturers for the long-term commercial supply of any of our product candidates. In the future, we may be unable to enter into agreements with third-party manufacturers for commercial supplies of such product candidates or may be unable to do so on acceptable terms.

Even if we are able to establish and maintain arrangements with third-party manufacturers, reliance on third-party manufacturers entails risks, including:

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reliance on the third party for regulatory compliance and quality assurance;

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the possible breach of the manufacturing agreement by the third party;

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the failure of such parties to manufacture product candidates according to our specifications or on schedule;

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the possible misappropriation of our proprietary information, including our trade secrets and know-how; and

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the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us.

The facilities used by our third-party manufacturers must be approved for the manufacture of our product candidates by the FDA, or any comparable foreign regulatory authority, pursuant to inspections that will be conducted after we submit an NDA to the FDA, or submit a comparable marketing application to a foreign regulatory authority. We do not control the manufacturing process of, and are completely dependent on, third-party manufacturers for compliance with cGMP requirements for manufacture of our product candidates. If these third-party manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or any comparable foreign regulatory authority, they will not be able to secure and/or maintain regulatory approval for the use of their manufacturing facilities.

In addition, we have no control over the ability of third-party manufacturers to maintain adequate quality control, quality assurance and qualified personnel. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates.

Our product candidates may compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us.

If the third parties that we engage to supply any materials or manufacture product for our preclinical and nonclinical studies and clinical trials should cease to continue to do so for any reason, we likely would experience delays in advancing these studies and trials while we identify and qualify replacement suppliers, and we may be unable to obtain replacement supplies on terms that are favorable to us. In addition, if we are not able to obtain adequate supplies of our product candidates or the substances used to manufacture them, it will be more difficult for us to develop such product candidates and compete effectively.

Our current and anticipated future dependence upon others for the manufacture of our product candidates may adversely affect our future profit margins and our ability to develop product candidates and commercialize any products that receive regulatory approval on a timely and competitive basis.

Risks Related to the Commercialization of Our Product Candidates

Even if any of our product candidates receives regulatory approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors, and others in the medical community necessary for commercial success.

Even if we obtain approvals from the FDA or other comparable regulatory agencies and are able to initiate commercialization of any of our product candidates, such product candidates may not achieve market acceptance among physicians, patients and third-party payors and, ultimately, may not be commercially successful. The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including:

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the safety, tolerability, efficacy and ease of use of a once-a-day oral dose and other potential advantages compared to alternative treatments;

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the potential and perceived advantages and disadvantages of the product candidates, including cost and clinical benefit relative to alternative treatments;

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the convenience and ease of once-a-day oral administration compared to alternative treatments (e.g., inhaled drug through nebulizer);

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the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

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acceptance by physicians, patients, payor-formularies and treatment facilities and parties responsible for coverage and reimbursement of the product;

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the availability of coverage and adequate reimbursement by third-party payors, including government authorities;

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our ability to manufacture the product candidates in sufficient quantities and yields;

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the strength and effectiveness of marketing and distribution support;

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the prevalence and severity of any side effects;

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limitations or warnings, including distribution or use restrictions, contained in the product’s approved labeling or an approved REMS;

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whether the product is designated under physician treatment guidelines as a first-line therapy or as a second- or third-line therapy for particular infections;

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whether the product is safe, tolerable and efficacious when used in combination therapy with the current multi-drug standard of care regimen;

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the approval of other new products for the same indications;

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the timing of market introduction of the approved product as well as competitive products; and

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the emergence of bacterial resistance to the product.

If the market size of any product candidate that obtains regulatory approval is significantly smaller than we anticipate, it may not achieve market acceptance or commercial success. This could significantly and negatively impact our business, financial condition, results of operations and growth prospects.

We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.

The development and commercialization of new drug products is highly competitive. We face competition from major multi-national pharmaceutical companies, biotechnology companies, specialty pharmaceutical companies and generic drug companies with respect to the product candidates that we intend to develop and commercialize. Potential competitors also include academic institutions, government agencies and other public and private research organizations. If our competitors obtain regulatory approval from the FDA or other comparable regulatory authorities for their product candidates more rapidly than we do, it could result in our competitors establishing a strong market position before we are able to enter the market. Our competitors may also succeed in developing, acquiring or licensing technologies and drug products that are more effective, more effectively marketed and sold, or less costly than any product candidates that we may develop, which could render our product candidate non-competitive and obsolete.

Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical and nonclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than we do as an organization. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. In addition, following the announcement of topline data from the Phase 2 portion of our Phase 2/3 clinical trial evaluating epetraborole, we effected a restructuring resulting in the elimination of a significant portion of the workforce and could result in additional unplanned loss of personnel. Continued disruption caused by the transition or by the loss of ongoing services of any qualified scientific and management personnel could delay or prevent the successful development of our current and future product candidates.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient, or are less expensive than any product candidates that we may develop. Our competitors also may obtain approval from the FDA or other comparable regulatory agencies for their product candidates more rapidly than we may obtain approval for ours, which could result in product approval delays if a competitor obtains market exclusivity from the FDA or any comparable regulatory agencies or our competitors establish a strong market position before we are able to enter the market. In addition, our ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of generic drugs. Additional drugs may become available on a generic basis over the coming years. If any of our product candidates achieve regulatory approval, we expect that they will be priced at a significant premium over competitive generic drugs.

If we are unable to establish sales, marketing and distribution capabilities for our product candidates, or enter into sales, marketing and distribution agreements with third parties, we may not be successful in commercializing our product candidates, if and when they are approved.

We do not have a sales or marketing infrastructure and have limited experience in the sale, marketing, or distribution of pharmaceutical products. To achieve commercial success for any product candidate for which we may obtain regulatory approval, we will need to establish a sales and marketing organization or enter into collaboration, distribution and other marketing arrangements with one or more third parties to commercialize such product candidate. In the United States and other key markets, we intend to build a commercial organization to target areas with the greatest incidence of conditions for which we may at some point obtain regulatory approval and recruit experienced sales, marketing and distribution professionals. The development of sales, marketing and distribution capabilities will require substantial resources, will be time-consuming and could delay any product launch. We may decide to work with regional specialty pharmacies, distributors, and/or multi-national pharmaceutical companies to leverage their commercialization capabilities to commercialize any product candidate for which we may obtain regulatory approval outside of the United States.

If the commercial launch of a product candidate for which we recruit a sales force and establish marketing and distribution capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization costs. This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel. In addition, we may not be able to hire a sales force in the United States that is sufficient in size or has adequate expertise to target the areas that we intend to target. If we are unable to establish a sales force and marketing and distribution capabilities, our operating results may be adversely affected.

Factors that may inhibit our efforts to commercialize our drugs on our own include:

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our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;

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the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future products;

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the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage compared to companies with more extensive product lines;

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unforeseen costs and expenses associated with creating an independent sales and marketing organization; and

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unforeseen costs and limitations with regard to setting up a distribution network.

If we are unable to establish our own sales, marketing and distribution capabilities in the United States and other jurisdictions in which any of our product candidates are approved and, instead, enter into arrangements with third parties to perform these services, our revenues and profitability, if any, are likely to be lower than if we were to sell, market and distribute any product candidates that we develop ourselves. We may not be successful in entering into arrangements with third parties to sell, market and distribute our product candidates or may be unable to do so on terms that are favorable to us. We likely will have limited control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our product candidates effectively. If we do not establish sales, marketing and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing any product candidates.

Coverage and adequate reimbursement may not be available for any of our product candidates, which could make it difficult for us to sell profitably, if approved.

Market acceptance and sales of any product candidates that we commercialize, if approved, will depend in part on the extent to which reimbursement for these drugs and related treatments will be available from third-party payors, including government health administration authorities, managed care organizations and other private health insurers. Third-party payors decide which therapies they will pay for and establish reimbursement levels. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies. However, decisions regarding the extent of coverage and amount of reimbursement to be provided for any product candidates that we develop will be made on a payor-by-payor basis. One payor’s determination to provide coverage for a drug does not assure that other payors will also provide coverage and adequate reimbursement for the drug. Additionally, a third-party payor’s decision to provide coverage for a therapy does not imply that an adequate reimbursement rate will be approved. Each payor determines whether or not it will provide coverage for a therapy, what amount it will pay the manufacturer for the therapy, and on what tier of its list of covered drugs, or formulary, it will be placed. The position on a payor’s formulary generally determines the co-payment that a patient will need to make to obtain the therapy and can strongly influence the adoption of such therapy by patients and physicians. Patients who are prescribed treatments for their conditions and providers prescribing such services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use our drugs, and providers are unlikely to prescribe our drugs, unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our drugs and their administration.

A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. We cannot be sure that coverage and reimbursement will be available for any drug that we commercialize and, if reimbursement is available, what the level of reimbursement will be. Inadequate coverage and reimbursement may impact the demand for, or the price of, any drug for which we obtain regulatory approval. If coverage and adequate reimbursement are not available, or are available only to limited levels, we may not be able to successfully commercialize any product candidates that we develop.

Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.

We face an inherent risk of product liability exposure related to the testing of our product candidates in human clinical trials and will face an even greater risk if we commercially sell any drugs that we may develop. If we cannot successfully defend ourselves against claims that our product candidates or products caused injuries, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

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reduced resources of our management to pursue our business strategy;

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decreased demand for any product candidates or products that we may develop;

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injury to our reputation and significant negative media attention;

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withdrawal of clinical trial participants;

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initiation of investigations by regulators;

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product recalls, withdrawals or labeling, marketing or promotional restrictions;

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significant costs to defend the resulting litigation;

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substantial monetary awards paid to clinical trial participants or patients;

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loss of revenue;

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the inability to commercialize any drugs that we may develop; and

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a decline in our share price.

Our product liability insurance coverage may not be adequate to cover all liabilities that we may incur. We may need to increase our insurance coverage as we expand our clinical trials or if we commence commercialization of any product candidates. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise, if at all. Our product liability insurance policy contains various exclusions, and we may be subject to a product liability claim for which we have no coverage. We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Even if our agreements with current or future collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise.

There are a variety of risks associated with marketing our product candidates internationally, which could affect our business.

We may seek regulatory approval for our product candidates outside of the United States and, accordingly, we expect that we will be subject to additional risks related to operating in foreign countries if we obtain the necessary approvals, including:

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differing regulatory requirements and reimbursement landscapes in foreign countries;

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the potential for so-called parallel importing, which is what happens when a local seller, faced with high or higher local prices, opts to import goods from a foreign market with low or lower prices rather than buying them locally;

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unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements;

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economic weakness, including inflation or political instability in particular foreign economies and markets;

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compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

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foreign taxes, including withholding of payroll taxes;

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foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;

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difficulties staffing and managing foreign operations;

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workforce uncertainty in countries where labor unrest is more common than in the United States;

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potential liability under the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), or comparable foreign regulations;

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challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States;

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production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

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business interruptions resulting from geo-political actions, including war and terrorism.

These and other risks associated with our international operations may compromise our ability to achieve or maintain profitability.

Risks Related to Our Business, Industry and Managing Our Growth

We operate with a small team and our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.

We are highly dependent on the management, research and development, financial and business development expertise of Eric Easom, our co-founder, president, and chief executive officer, Sanjay Chanda, Ph.D., our chief development officer, Lucy Day, our chief financial officer, Josh Eizen, J.D., our chief legal and operating officer, Michael R.K. (Dickon) Alley, Ph.D., our co-founder and SVP research fellow and head of biology, Stephen Prior, Ph.D., our chief strategy officer, and Vincent Hernandez, our senior vice president research and head of chemistry, as well as the other members of our research, development, and business teams. Each may terminate employment with us at any time. We do not maintain “key person” insurance for any of our executives or employees.

Our limited personnel and resources may result in greater workloads for our employees compared to those at companies with which we compete for personnel, which may lead to higher levels of employee dissatisfaction and turnover. Recruiting and retaining qualified research, development, and business personnel and, if we progress the development of our product candidates, commercialization, manufacturing, and sales and marketing personnel, will be critical to our success. The loss of the services of our executive officers or other key employees could impede the achievement of our research, development, and commercialization objectives and seriously harm our ability to successfully implement our business strategy. Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize our product candidates. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of research and development personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may have commitments under consulting or advisory contracts with other entities that may limit their availability to us. If we are unable to continue to attract and retain high-quality personnel, our ability to pursue our growth strategy will be limited.

Macroeconomic uncertainties have in the past and may continue to adversely impact our business, financial condition, results of operations and growth prospects.

The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including, among other things, severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, supply chain shortages, increases in inflation rates, higher interest rates and uncertainty about economic stability. Higher interest rates, coupled with reduced government spending and volatility in financial markets may increase economic uncertainty and affect consumer spending. Similarly, volatility and disruptions in global markets and supply chains and global conflicts may adversely affect our business or the third parties on whom we rely. If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. Increased inflation rates can adversely affect us by increasing our costs, including labor and employee benefit costs. To the extent that macroeconomic uncertainties continue to harm our business, financial condition, results of operations and growth prospects, many of the other risks described in this “Risk Factors” section will be exacerbated.

We have identified material weaknesses in our internal control over financial reporting. Due to our failure to maintain effective internal control over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business.

Prior to the completion of the IPO, we had been a private company with limited accounting personnel to adequately execute our accounting processes and other supervisory resources with which to address our internal control over financial reporting. In connection with the preparation of our financial statements, we identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses are as follows:

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We did not design and maintain an effective control environment commensurate with our financial reporting requirements. Specifically, we lacked a sufficient complement of resources with (i) an appropriate level of accounting knowledge, experience and training to appropriately analyze, record and disclose accounting matters timely and accurately, and (ii) an appropriate level of knowledge and experience to establish effective processes and controls. Additionally, the lack of a sufficient number of professionals resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of our financial reporting objectives, as demonstrated by, among other things, insufficient segregation of duties in our finance and accounting functions. This material weakness contributed to the following additional material weaknesses.

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We did not design and maintain effective controls related to the period-end financial reporting process, including designing and maintaining formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures. Additionally, we did not design and maintain controls over the preparation and review of account reconciliations and journal entries, including maintaining appropriate segregation of duties.

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We did not design and maintain effective controls related to the accounting for certain non-routine or complex transactions, including the proper application of U.S. GAAP to such transactions.

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We did not design and maintain effective controls over information technology (“IT”) general controls for information systems that are relevant to the preparation of our financial statements. Specifically, we did not design and maintain (i) program change management controls to ensure that information technology program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately, (ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate Company personnel, (iii) computer operations controls to ensure that critical batch jobs are monitored and data backups are authorized and monitored, and (iv) testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements.

These IT deficiencies did not result in adjustments to the financial statements. However, the IT deficiencies, when aggregated, could impact maintaining effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected. Accordingly, management has determined the IT deficiencies in the aggregate constitute a material weakness.

We cannot assure you that there will not be future material weaknesses in our internal control over financial reporting in the future. The failure to maintain effective internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations, or cash flows. These identified material weaknesses, or any additional material weaknesses, in our internal control over financial reporting may cause investors to lose confidence in the accuracy and completeness of our financial reports and/or cause the market price of our common stock to decline, and we could be subject to sanctions or investigations by Nasdaq Stock Market LLC, the SEC or other regulatory authorities. Failure to remediate material weaknesses in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

If in the future, we need to expand our research, development, and business capabilities and implement sales, marketing, and distribution capabilities, we may encounter difficulties in managing such growth, which could disrupt our operations.

Although we recently effected a restructuring to reduce our workforce by approximately 50%, if the development of our product candidates progresses, we may experience growth in the scope of our operations, particularly in the areas of research, drug development, regulatory affairs and, if any of our product candidates receives regulatory approval, sales, marketing and distribution. To manage any such growth, we will need to implement and improve our managerial, operational, and financial systems, expand our facilities and recruit and train additional qualified personnel. Due to our limited financial resources and the limited experience of our management team in managing a company with such growth, we may not be able to effectively manage such an expansion of our operations or recruit and train additional qualified personnel. The expansion of our operations may also lead to significant costs and may divert our management and research and development resources. Any inability to manage growth could delay the execution of our business plans or disrupt our operations.

If we engage in future acquisitions or strategic collaborations, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks.

From time to time, we may evaluate various acquisitions and strategic collaborations, including licensing or acquiring complementary drug products, intellectual property rights, technologies or businesses, as deemed appropriate to carry out our business plan. Any potential acquisition or strategic collaboration may entail numerous risks, including:

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increased operating expenses and cash requirements;

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the assumption of additional indebtedness or contingent liabilities;

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assimilation of operations, intellectual property and drug products of an acquired company, including difficulties associated with integrating new personnel;

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the diversion of our management’s attention from our existing drug development programs and initiatives in pursuing such a strategic partnership, merger, or acquisition;

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retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships;

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risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing drugs or drug candidates and regulatory approvals; and

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our inability to generate revenue from acquired technology and/or drugs sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.

Risks Related to Our Intellectual Property

If we are unable to obtain and maintain patent and other intellectual property protection for our technology, or for our product candidates, or if the scope of the patent and other intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and drugs similar or identical to ours, and our ability to successfully commercialize our technology and product candidates may be impaired.

We do not own any issued patents and we in-license patents and patent applications for our product candidates, and our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to our product candidates. We seek to protect our proprietary position by in-licensing intellectual property relating to our product candidates including patent applications in the United States and abroad related to our technology and product candidates that are important to our business. If we or our licensors do not adequately protect the intellectual property we in-license or own, competitors may be able to use our technologies and erode or negate any competitive advantage that we may have, which could harm our business and ability to achieve profitability. To protect our proprietary positions, we and our licensors file patent applications in the United States and abroad related to our novel technologies and product candidates that are important to our business. The patent application and prosecution process is expensive and time-consuming. We and our current licensors and licensees, or any future licensors and licensees, may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. We or our current licensors and licensees, or any future licensors or licensees may also fail to identify patentable aspects of our research and development before it is too late to obtain patent protection, or fail to continue to prosecute patents relating to our product candidates. Therefore, these and any of our in-licensed patents and patent applications may not be prosecuted and enforced in a manner consistent with the best interests of our business. It is possible that defects of form in the preparation or filing of our licensors’ patents or our patent applications may exist, or may arise in the future, such as with respect to proper priority claims, inventorship, claim scope or patent term adjustments. If our current licensors and licensees, or any future licensors or licensees, are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised and we might not be able to prevent third parties from making, using, and selling competing products. We cannot predict whether the patent applications we and our licensors or licensees are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient protection from competitors. If there are material defects in the form or preparation of our or our licensors’ patents or patent applications, such patents or applications may be invalid and unenforceable. Moreover, our competitors may independently develop equivalent knowledge, methods, and know-how, and we may not be able to prevent such competitors from commercializing such equivalent knowledge, methods, and know-how. Any of these outcomes could impair our ability to prevent competition from third parties and could have a material adverse effect on our business, financial condition, results of operations and growth prospects. The patent position of biotechnology and pharmaceutical companies generally is highly uncertain and has been the subject of much litigation in recent years. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States. No consistent policy regarding the breadth of claims allowed in biotechnology and pharmaceutical patents has emerged to date in the United States or in many foreign jurisdictions. In addition, the determination of patent rights with respect to pharmaceutical compounds and technologies commonly involves complex legal and factual questions, which has in recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Furthermore, recent changes in patent laws in the United States, including the America Invents Act of 2011, and future changes in patent laws in or outside the United States may affect the scope, strength and enforceability of our patent rights or the nature of proceedings that may be brought by us related to our patent rights.

We may not be aware of all third-party intellectual property rights potentially relating to our product candidates. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we or our licensors were the first to make the inventions claimed in patents or pending patent applications that we in-license or own, or that we or our licensors were the first to file for patent protection of such inventions. As a result, the issuance, scope, validity and commercial value of our patent rights cannot be predicted with any certainty. Moreover, we or our licensors may be subject to a third-party pre-issuance submission of prior art to the U.S. Patent and Trademark Office (“USPTO”), or become involved in opposition, derivation, reexamination, inter partes review, or interference proceedings, in the United States or elsewhere, challenging our patent rights or the patent rights of others. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or product candidates, and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize product candidates without infringing third-party patent rights.

Our licensors’ pending and future patent applications and our own pending and future patent applications may not result in patents being issued that protect our technology or product candidates, in whole or in part, or which effectively prevent others from commercializing competitive technologies and products. Even if our or our licensors’ patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection against competing products or processes sufficient to achieve our business objectives, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our in-licensed patents or any patents we may own in the future by developing similar or alternative technologies or products in a non-infringing manner. Our competitors may seek to market generic versions of any approved products by submitting abbreviated NDAs to the FDA in which they claim that patents licensed by us or may be owned by us in the future are invalid, unenforceable, and/or not infringed. Alternatively, our competitors may seek approval to market their own products similar to or otherwise competitive with our product candidates. In these circumstances, we may need to defend and/or assert our in-licensed or owned patents, including by filing lawsuits alleging patent infringement. In any of these types of proceedings, a court, or other agency with jurisdiction may find our in-licensed patents or any owned patents, should such patents issue in the future, invalid and/or unenforceable.

The issuance of a patent is not conclusive as to its inventorship, scope, validity, or enforceability, and our in-licensed patents or patents we may own in the future may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and product candidates, or limit the duration of the patent protection of our technology and product candidates. In addition, given the amount of time required for the development, testing, and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. Any impairment of our intellectual property rights, or our failure to protect our intellectual property rights adequately, could give third parties access to our technology and product candidates and could materially and adversely impact our business, financial condition, results of operations and growth prospects.

Our rights to develop and commercialize our technology and our other product candidates are subject, in large part, to the terms and conditions of licenses granted to us by others, such as Anacor. If we fail to comply with our obligations in the agreements under which we in-license or acquire development or commercialization rights to products, technology, or data from third parties, we could lose such rights that are important to our business.

For certain product candidates, we rely on licenses to certain patent rights and other intellectual property that are important or necessary to the development of these compounds. For example, we depend on a license agreement from Anacor, a biopharmaceutical company that originally developed epetraborole and is currently a wholly-owned subsidiary of Pfizer. Additionally, we have licensed our rights under the Anacor agreement in China, Hong Kong, Taiwan and Macau to Brii Biosciences.

Anacor has relied upon, and any future licensors may have relied upon, third-party companies, consultants or collaborators, or on funds from third parties such that our licensors are not the sole and exclusive owners of the patents we in-licensed. We have sublicensed certain patents from Anacor that are owned, maintained and prosecuted by GSK. If third-party companies such as GSK fail to prosecute, maintain, enforce and defend such patents, or lose rights to those patents, the rights we have licensed may be reduced or eliminated, and our right to develop and commercialize our product candidates that are the subject of such licensed rights could be adversely affected. Further, we rely upon Anacor’s compliance with its license agreement with GSK to maintain our sublicense to such patents owned by GSK, and any termination of Anacor’s license agreement with GSK could result in us losing our license to epetraborole. Further development and commercialization of our product candidates may require us to enter into additional license or collaboration agreements. Our future licenses may not provide us with exclusive rights to use the licensed patent rights and other intellectual property, or may not provide us with exclusive rights to use such patent rights and intellectual property in all relevant fields of use and in all territories in which we wish to develop or commercialize our product candidates in the future.

Our license agreement with Anacor, and other intellectual property-related agreements we may enter into in the future may impose diligence and other obligations, including payment of milestones and royalties. For example, our license agreement from Anacor requires us to satisfy diligence requirements, including using commercially reasonable efforts to develop and commercialize products. If we fail to comply with our obligations to Anacor or any future licensors, those counterparties may have the right to terminate the license agreements, in which event we might not be able to develop, manufacture, or market any product candidate licensed under the agreements, which could materially adversely affect the value of the product candidate being developed under any such agreement and further involve termination of our rights to important intellectual property or technology.

In spite of our efforts, Anacor imposes or any future licensors might conclude that we are in material breach of obligations under our license agreements and may therefore have the right to terminate the license agreements, thereby removing our ability to develop and commercialize product candidates and technology covered by such license agreements. If such in-licenses are terminated, or if the underlying patents fail to provide the intended exclusivity, our competitors would have the freedom to seek regulatory approval of, and to market, products identical to our product candidates and the licensors to such in-licenses could prevent us from commercializing product candidates that rely upon the patents or other intellectual property rights which were the subject matter of such terminated agreements. In addition, we may seek to obtain additional licenses from our licensors and, in connection with obtaining such licenses, we may agree to amend our existing licenses in a manner that may be more favorable to the licensors, including by agreeing to terms that could enable third parties (potentially including our competitors) to receive licenses to a portion of the intellectual property that is subject to our existing licenses. Any of these events could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Under our license agreement with Anacor, and any future license agreements, disputes may arise regarding intellectual property subject to a licensing agreement, including:

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the scope of rights granted under the license agreement and other interpretation-related issues;

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the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;

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the sublicensing of patent and other rights under our collaborative development relationships;

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our diligence obligations under the license agreement and what activities satisfy those diligence obligations;

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the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and

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the priority of invention of patented technology.

In addition, the license agreements involving intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

We may not be successful in obtaining necessary rights to any product candidates we may develop through acquisitions and in-licenses.

We currently have rights to intellectual property, through licenses from third parties, to identify and develop product candidates. We may find it necessary or prudent to obtain licenses from such third-party intellectual property holders in order to avoid infringing these third-party patents. For example, many pharmaceutical companies, biotechnology companies and academic institutions compete with us and may be filing patent applications potentially relevant to our business. The licensing or acquisition of third-party intellectual property rights is a competitive area, and several more established companies may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive or necessary. These established companies may have a competitive advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to license rights to us. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all. If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have, we may have to abandon development of the relevant program or product candidate, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

We may become involved in lawsuits to protect or enforce our owned or in-licensed patents or other intellectual property, which could be expensive, time-consuming and unsuccessful.

Competitors or other third parties may infringe, misappropriate or otherwise violate our in-licensed issued patents or other intellectual property we may own. To counter such infringement, misappropriation or other unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming and divert the time and attention of our management and scientific personnel. Any claims we assert against third parties could provoke these parties to assert counterclaims against us alleging that we infringe, misappropriate or otherwise violate their patents, trademarks, copyrights or other intellectual property. In addition, our in-licensed patents may become involved in inventorship or priority disputes. Third parties may raise challenges to the validity of certain of our in-licensed patent claims and may in the future raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. For example, we may be subject to a third-party pre-issuance submission of prior art to the USPTO, or become involved in derivation, revocation, reexamination, post-grant review (“PGR”), inter partes review (“IPR”), interference proceedings and equivalent proceedings in foreign jurisdictions, such as opposition proceedings challenging any patents that we may own or in-license. Such submissions may also be made prior to a patent’s issuance, precluding the granting of a patent based on one of our owned or licensed pending patent applications. A third party may also claim that our potential future owned patents or licensed patent rights are invalid or unenforceable in a litigation. The outcome following legal assertions of invalidity and unenforceability is unpredictable. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, invalidate, or render unenforceable, our potential future owned patents or licensed patent rights, allow third parties to commercialize our product candidates and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights In a patent infringement proceeding, there is a risk that a court will decide that a patent we in-license is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other party from using the invention at issue. There is also a risk that, even if the validity of such patents are upheld, the court will construe the patent’s claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our in-licensed patents do not cover the invention. An adverse outcome in a litigation or proceeding involving our in-licensed patents could limit our ability to assert our in-licensed patents against those parties or other competitors and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive products. Similarly, in the future, we expect to rely on trademarks to distinguish our product candidates that are approved for marketing, if any, and if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question. In this case, we could ultimately be forced to cease use of such trademarks.

In any infringement litigation, any award of monetary damages we receive may not be commercially valuable. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during litigation. In addition, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Moreover, there can be no assurance that we will have sufficient financial or other resources to adequately file and pursue such infringement claims, which typically last for years before they are concluded. Some of our competitors and other third parties may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios. Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the attention of our management and scientific personnel could outweigh any benefit we receive as a result of the proceedings. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing, misappropriating, or successfully challenging our intellectual property rights. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a negative impact on our ability to compete in the marketplace, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Third parties may initiate legal proceedings alleging that we are infringing misappropriating, or otherwise violating their intellectual property rights, the outcome of which would be uncertain and could significantly harm our business.

Our commercial success depends, in part, on our ability to develop, manufacture, market and sell our product candidates and use our proprietary chemistry technology without infringing, misappropriating or otherwise violating the intellectual property of third parties. Numerous third-party U.S. and non-U.S. issued patents exist in the area of antibacterial treatment, including compounds, formulations, treatment methods, and synthetic processes that may be applied towards the synthesis of antibiotics. If any such patents of third parties cover our product candidates or technologies, we may not be free to manufacture or market our product candidates as planned.

There is a substantial amount of intellectual property litigation in the biotechnology and pharmaceutical industries, and we may become party to, or threatened with, litigation, or other adversarial proceedings regarding intellectual property rights with respect to our technology or product candidates, including interference proceedings before the USPTO. Third parties may assert claims against us based on existing or future intellectual property rights. The outcome of intellectual property litigation is subject to uncertainties that cannot be adequately quantified in advance.

If we are found to have infringed, misappropriated, or otherwise violated any third party’s intellectual property rights, we could be forced, including by court order, to cease developing, manufacturing, or commercializing our product candidates. Alternatively, we may be required to obtain a license from such third party in order to use technology and continue developing, manufacturing or marketing product candidates that infringe or violate such third party’s intellectual property. However, we may not be able to obtain any such required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. We may also be required to pay substantial ongoing royalty or license payments or fees or comply with other unfavorable terms. In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent or other intellectual property right. A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative effect on our business. Even if we were to prevail in such a dispute, any litigation regarding our intellectual property could be costly and time-consuming and divert the attention of our management and key personnel from our business operations. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. During the course of litigation, there could be public announcements or the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Negative publicity related to a decision by us to initiate such enforcement actions against a customer or former customer, regardless of its accuracy, may adversely impact our other customer relationships or prospective customer relationships, harm our brand and business and could cause the market price of our common stock to decline. Any of the foregoing arising from uncertainty in legal proceedings could materially and adversely impact our business, financial condition, results of operations and growth prospects.

We may be subject to claims by third parties asserting that we or our employees, consultants, and advisors have misappropriated their intellectual property or claiming ownership of what we regard as our own intellectual property.

Many of our employees, consultants and advisors were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know-how of third parties in their work for us, we may be subject to claims that we or such employees, consultants and advisors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s former employer. We may also in the future be subject to claims that we have caused an employee to breach the terms of his or her non-competition or non-solicitation agreement. Litigation may be necessary to defend against these potential claims.

In addition, while it is our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, such employees and contractors may breach the agreement and claim the developed intellectual property as their own. Further, we may be unsuccessful in executing such agreements with each party who, in fact, conceives, or develops intellectual property that we regard as our own. The assignment of intellectual property rights may not be self-executing and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.

If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. A court could prohibit us from using technologies or features that are essential to our product candidates if such technologies or features are found to incorporate or be derived from the trade secrets or other proprietary information of the former employers. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and could be a distraction to management. In addition, any litigation or threat thereof may adversely affect our ability to hire employees or contract with independent service providers. Moreover, a loss of key personnel or their work product could hamper or prevent our ability to commercialize our product candidates. Any of the foregoing could have a material adverse impact on our business, financial condition, results of operations and growth prospects.

Any trademarks we may obtain may be infringed or successfully challenged, resulting in harm to our business.

We expect to rely on trademarks as one means to distinguish any of our product candidates that are approved for marketing from the products of our competitors. We have not yet selected trademarks for our product candidates and have not yet begun the process of applying to register trademarks for our product candidates. Once we select trademarks and apply to register them, our trademark applications may not be approved. Third parties who have prior rights to our trademarks or third parties who have prior rights to similar trademarks may oppose our trademark applications, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our product candidates, which could result in loss of brand recognition and could require us to devote resources to advertising and marketing new brands. At times, competitors may adopt trade names or trademarks similar to ours, thereby diluting or impeding our ability to build brand identity and possibly leading to market confusion. Our competitors may infringe our trademarks and we may not have adequate resources to enforce our trademarks and may not be able to prevent such third parties from using and marketing any such trademarks.

In addition, any proprietary name we propose to use with any product candidate in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark. The FDA typically conducts a review of proposed product names, including an evaluation of the potential for confusion with other product names. If the FDA objects to any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable proprietary product name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA. If we are unable to establish name recognition based on our trademarks, we may not be able to compete effectively and our business, financial condition, results of operations and growth prospects may be adversely affected.

If we are unable to protect the confidentiality of our proprietary information, know-how and trade secrets, the value of our product candidates could be adversely affected and our business and competitive position would be harmed.

In addition to seeking patent protection for our product candidates, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position. We seek to protect our trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors and other third parties. We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants. However, these agreements may be inadequate to protect our proprietary and intellectual property rights. Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets. In addition, we may not be able to obtain adequate remedies for any such breaches. Although we use reasonable efforts to protect this proprietary information and technology, we also cannot guarantee that we have entered into such agreements with each party that may have or have had access to our confidential information, know-how, trade secrets or other proprietary information or each individual who has developed intellectual property on our behalf. Monitoring unauthorized uses and disclosures of our intellectual property is difficult, and we do not know whether the steps we have taken to protect our intellectual property will be effective. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive, distracting to management, and time-consuming, and the outcome is unpredictable and varied depending on the jurisdiction. In addition, some courts inside and outside the United States, in countries in which we operate or intend to operate, are less willing, or unwilling, to protect trade secrets, know-how and other proprietary information. Any claims or litigation could cause us to incur significant expenses. Some third parties may be able to sustain the costs of complex litigation more effectively than we can because they have substantially greater resources.

Our employees, consultants, and other parties may unintentionally or willfully disclose our information or technology to competitors and there can be no assurance that the legal protections and precaution taken by us will be adequate to prevent misappropriation of our technology or that competitors will not independently develop technologies equivalent or superior to ours. Trade secrets and know-how can be difficult to protect. Our competitors or other third parties may independently develop knowledge, methods and know-how equivalent to our trade secrets. Additionally, competitors could purchase our product candidates and replicate some or all of the competitive advantages we derive from our development efforts for technologies on which we do not have patent protection. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

If we or our licensors do not obtain patent term extension and data exclusivity for any product candidates we or our licensors may develop, our business may be materially harmed.

Given the amount of time required for the development, testing, and regulatory review of new product candidates, patents we license or may own in the future protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our intellectual property may not provide us with sufficient rights to exclude others from commercializing products similar or identical to our product candidates. Depending upon the timing, duration, and specifics of any FDA approval of any of our product candidates, one or more of our in-licensed U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Action of 1984 (the “Hatch-Waxman Amendments”). The Hatch-Waxman Amendments permit a patent extension term of up to five years as compensation for patent term lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended. However, we may not be granted an extension because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents, or otherwise failing to satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded could be less than we request. If we are unable to obtain patent term extension or term of any such extension is less than we request, our competitors may obtain approval of competing products following our patent expiration, and our business, financial condition, results of operations and growth prospects could be materially harmed.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance fees, renewal fees, annuity fees and various other government fees on patents and applications will be due to be paid to the USPTO and various government patent agencies outside of the United States over the lifetime of our owned or in-licensed patents and applications. In certain circumstances, we rely on our licensing partners to pay these fees due to U.S. and non-U.S. patent agencies. The USPTO and various non-U.S. government agencies require compliance with several procedural, documentary, fee payment and other similar provisions during the patent application process. We are also dependent on our licensors to take the necessary action to comply with these requirements with respect to our licensed intellectual property. In some cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. There are situations, however, in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in a partial or complete loss of patent rights in the relevant jurisdiction. In such an event, potential competitors might be able to enter the market with similar or identical products or technology, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

We may not be able to protect our intellectual property rights throughout the world.

Filing, prosecuting, and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States could be less extensive than those in the United States. In some cases, we or our licensors may not be able to obtain patent protection for certain licensed technology outside the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States, even in jurisdictions where we or our licensors do pursue patent protection. Consequently, we may not be able to prevent third parties from practicing our in-licensed inventions in all countries outside the United States, even in jurisdictions where our licensors do pursue patent protection or from selling or importing products made using our inventions in and into the United States or other jurisdictions.

Competitors may use our technologies in jurisdictions where we or our licensors have not pursued and obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our product candidates and our preclinical programs. Our in-licensed patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our in-licensed patents, if pursued and obtained, or the marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our in-licensed patents at risk of being invalidated or interpreted narrowly and our in-licensed patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If we or any of our licensors are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations and growth prospects may be adversely affected.

Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters

If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we will not be able to commercialize our product candidates, and our ability to generate revenue will be materially impaired.

Our product candidates and the activities associated with their development and commercialization, including their design, testing, manufacture, safety, efficacy, record-keeping, labeling, storage, approval, advertising, promotion, sale, import, export and distribution, are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by comparable foreign regulatory authorities, with regulations differing from country to country. Failure to obtain regulatory approval for a product candidate will prevent us from commercializing the product candidate. We currently do not have any products approved for sale in any jurisdiction. For example, we are not permitted to market any product candidate in the United States until we receive regulatory approval of an NDA from the FDA. We as a company only have limited experience in filing and supporting the applications necessary to gain regulatory approvals and may rely on third-party contract research organizations to assist us in this process.

Approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development. For instance, changes to leadership and the reorganization and rededication of critical resources at the FDA and within similar governmental health authorities across the world, may impact the ability of new products and services from being developed or commercialized in a timely manner. Regulations and requirements vary among jurisdictions, including in Japan and Europe. We have not obtained regulatory approval for any product candidate, and it is possible that our product candidates will never obtain regulatory approval.

We have not sought or obtained regulatory approval for any product candidate, and it is possible that any product candidates we may seek to develop will never obtain regulatory approval. In order to obtain approval to commercialize a product candidate in the United States or abroad, we or our collaborators must demonstrate to the satisfaction of the FDA or foreign regulatory agencies, that such product candidates are safe and effective for their intended uses. Results from nonclinical studies and clinical trials can be interpreted in different ways. Even if we believe that the nonclinical or clinical data for a product candidate is promising, such data may not be sufficient to support approval by the FDA and other regulatory authorities. The FDA may also require us to conduct additional nonclinical studies or clinical trials for product candidates either prior to or post-approval, and it may otherwise object to elements of our clinical development program.

The FDA or any foreign regulatory bodies can delay, limit or deny approval of our product candidates or require us to conduct additional nonclinical or clinical testing or abandon a program for many reasons, including:

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disagreement with the design, endpoint selection, or implementation of our clinical trials;

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negative or ambiguous results from our clinical trials or results that may not meet the level of statistical significance required by the FDA or comparable foreign regulatory agencies for approval;

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serious and unexpected drug-related side effects experienced by participants in our clinical trials or by individuals using drugs similar to our product candidates;

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the population studied may not be sufficiently broad or representative to assure safety in the full populations for which we seek approval;

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our inability to demonstrate to the satisfaction of the FDA or the applicable foreign regulatory body that our product candidates are safe and effective for the proposed indication;

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disagreement with the interpretation of data from nonclinical studies or clinical trials;

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our inability to demonstrate the clinical and other benefits of our product candidates outweigh any safety or other perceived risks;

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requirements for additional nonclinical studies or clinical trials;

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disagreement regarding the formulation, labeling, and/or the specifications we propose for our product candidates;

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approval may be granted only for indications that are significantly more limited than those sought by us, and/or may include significant restrictions on distribution and use;

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deficiencies in the manufacturing processes or facilities of the third-party manufacturers with which we contract for clinical and commercial supplies;

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refusals by regulators to accept a submission due to, among other reasons, the content or formatting of the submission; or

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changes in a policies, requirements, or regulations rendering our clinical data insufficient for approval.

Of the large number of drugs in development, only a small percentage complete the FDA or foreign regulatory approval processes and are successfully commercialized. The lengthy review process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval, which would significantly harm our business, financial condition, results of operations and growth prospects.

Even if we eventually receive approval of an NDA or foreign marketing application for our product candidates, the FDA, or the applicable foreign regulatory agency may grant approval contingent on the performance of costly additional clinical trials, often referred to as Phase 4 clinical trials, and the FDA may require the implementation of a REMS, which may be required to ensure safe use of the drug after approval. The FDA or the applicable foreign regulatory agency also may approve a product candidate for a more limited indication or patient population than we originally requested, and the FDA or applicable foreign regulatory agency may not approve the labeling that we believe is necessary or desirable for the successful commercialization of a product candidate. Any delay in obtaining, or inability to obtain, applicable regulatory approval would delay or prevent commercialization of that product candidate and would materially adversely impact our business and prospects.

Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, prevent new or modified products from being developed, review, approved or commercialized in a timely manner or at all, which could negatively impact our business.

The ability of the FDA and foreign regulatory authorities to review and approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s or foreign regulatory authorities’ ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s or foreign regulatory authorities’ ability to perform routine functions. Average review times at the FDA and foreign regulatory authorities have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. Disruptions at the FDA and other agencies may also slow the time necessary for new drugs or modifications to approved drugs and biologics to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.

Separately, in response to the COVID-19 pandemic, the FDA postponed most inspections at domestic and foreign manufacturing facilities at various points. Even though the FDA has since resumed standard inspection operations, any resurgence of the virus may lead to other inspectional or administrative delays. If a prolonged government shutdown occurs, or if global health concerns hinder or prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

We may not be able to obtain or maintain orphan drug designations for any product candidates, and we may be unable to take advantage of the benefits associated with orphan drug designation, including the potential for market exclusivity.

Regulatory authorities in some jurisdictions, including the United States, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act of 1983, the FDA may designate a product as an orphan product if it is intended to treat a rare disease or condition, which is generally defined as a diagnosed patient population of fewer than 200,000 individuals in the United States, or a patient population of greater than 200,000 individuals in the United States, but for which there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States. Similar laws exist in Europe and Japan. The European Commission may grant a product orphan medicinal product designation if the product is intended for the treatment, prevention or diagnosis of a life-threatening or very serious condition, with a prevalence in the European Union of not more than five in 10,000 people, and where either no satisfactory method of diagnosis, prevention or treatment of the condition in question exists, or if such method exists that the medicinal product will be of significant benefit to those affected by that condition.

As part of our business strategy, we intend to seek orphan drug designation, where applicable, from the FDA and orphan medicinal product designation from the European Commission; however, we may not be able to obtain or maintain this status for our product candidates. There can be no assurance that any regulatory authority will grant any orphan drug designations.

In the United States, orphan designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages, and user-fee waivers. In addition, if a product candidate that has orphan drug designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, it is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications, including an NDA, to market the same drug for the same disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or where the manufacturer is unable to assure sufficient product quantity.

More than one product may be approved by the FDA for the same orphan disease or condition, as long as the products are different drugs, as determined by the FDA. As a result, if any of our product candidates is approved by the FDA and receives orphan drug exclusivity, absent other applicable exclusivities, the FDA can still approve other drugs for use in treating the same indication or disease, which could create a more competitive market for us. The failure to successfully obtain orphan drug exclusivity would adversely affect our business.

Even if we obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs can be approved for the same disease or condition. Even after an orphan drug is approved, the FDA or comparable foreign regulatory authority can subsequently approve the same drug for the same disease or condition if such regulatory authority concludes that the later drug is clinically superior if it is shown to be safer, more effective, or makes a major contribution to patient care. Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process.

We may attempt to seek accelerated approval in the United States for certain of our product candidates. If we are not able to use that pathway, we may be required to conduct additional clinical trials beyond those that are contemplated, which would increase the expense of obtaining, and delay the receipt of, necessary regulatory approvals, if we receive them at all. In addition, even if an accelerated approval pathway is available to us, it may not lead to expedited approval of our product candidates, or approval at all.

Under the FDCA and implementing regulations, the FDA may grant accelerated approval to a product candidate to treat a serious or life-threatening condition that provides meaningful therapeutic benefit over available therapies, upon a determination that the product has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely to predict clinical benefit. The FDA considers a clinical benefit to be a positive therapeutic effect that is clinically meaningful in the context of a given disease, such as irreversible morbidity or mortality. For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. An intermediate clinical endpoint is a clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit measurement of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a drug.

The accelerated approval pathway may be used in cases in which the advantage of a new drug over available therapy may not be a direct therapeutic advantage, but is a clinically important improvement from a patient and public health perspective. If granted, accelerated approval is usually contingent on the sponsor’s agreement to conduct, in a diligent manner, additional confirmatory studies to verity and describe the drug’s clinical benefit. If such post-approval studies fail to confirm the drug’s clinical benefit or are not completed in a timely manner, the FDA may withdraw its approval of the drug on an expedited basis. In addition, in December 2022, President Biden signed an omnibus appropriations bill to fund the U.S. government through fiscal year 2023. Included in the omnibus bill is the Food and Drug Omnibus Reform Act of 2022, which among other things, provided FDA new statutory authority to mitigate potential risks to patients from continued marketing of ineffective drugs previously granted accelerated approval. Under these provisions, the FDA may require a sponsor of a product seeking accelerated approval to have a confirmatory trial underway prior to such approval being granted.

Prior to seeking accelerated approval for any of our product candidates we intend to seek feedback from the FDA or will otherwise evaluate ability to seek and receive accelerated approval. There can be no assurance that after our evaluation of the feedback and other factors we will decide to pursue or submit an NDA for accelerated approval or any other form of expedited development, review or approval. Furthermore, if we decide to submit an application for accelerated approval for our product candidates, there can be no assurance that such application will be accepted or that any expedited development, review or approval will be granted on a timely basis, or at all. The FDA or other comparable foreign regulatory authorities could also require us to conduct further studies prior to considering our application or granting approval of any type. A failure to obtain accelerated approval or any other form of expedited development, review or approval for our product candidate would result in a longer time period to commercialization of such product candidate, if any, could increase the cost of development of such product candidate and could harm our competitive position in the marketplace.

Failure to obtain regulatory approval in foreign jurisdictions would prevent our product candidates from being marketed in these territories. Any approval we are granted for our product candidates in the United States would not assure approval of such product candidates in foreign jurisdictions.

In order to market and sell our product candidates in Japan, the European Union, United Kingdom, other areas of Asia, Australia, and any other jurisdictions, we must obtain separate regulatory approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain approval from the FDA. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining approval from the FDA. In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can be approved for sale in that country. We may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and data from clinical studies approved by the FDA may not be accepted by foreign regulatory agencies, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. However, failure to obtain approval in one jurisdiction may impact our ability to obtain approval elsewhere. We may not be able to file for marketing authorization and may not receive necessary approvals to commercialize our product candidates in any market.

Even if we obtain regulatory approvals for our product candidates, the terms of approvals and ongoing regulation of such product candidates may limit how we manufacture and market the product candidates and compliance with such requirements may involve substantial resources, which could materially impair our ability to generate revenue.

Even if regulatory approval of any of our product candidates is granted, an approved product and its manufacturer and marketer are subject to ongoing review and extensive regulation, including with respect to the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export and recordkeeping for the product. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as ongoing compliance with cGMPs and GCPs for any clinical trials, In addition, manufacturers of approved products and those manufacturers’ facilities are required to comply with extensive FDA requirements including ensuring that quality control and manufacturing procedures conform to cGMP, which include requirements relating to quality control and quality assurance as well as the corresponding maintenance of records and documentation and reporting requirements. We and our contract manufacturers could be subject to periodic unannounced inspections by the FDA to monitor and ensure compliance with cGMP.

Accordingly, assuming we receive regulatory approval for one or more product candidates, we and our contract manufacturers will continue to expend time, money, and effort in all areas of regulatory compliance. If we or a regulatory agency discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facilities where the product is manufactured, a regulatory agency may impose restrictions on that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing. In addition, failure to comply with FDA and other comparable foreign regulatory requirements may subject our company to administrative or judicially imposed sanctions, including:

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restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market or voluntary or mandatory product recalls;

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restrictions on product distribution or use, or requirements to conduct post-marketing studies or clinical trials;

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fines, restitutions, disgorgement of profits or revenues, warning letters, untitled letters or holds on clinical trials;

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refusal by the FDA to approve pending applications or supplements to approved applications submitted, or suspension or revocation of approvals;

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product seizures or detentions, or refusal to permit the import or export of our products; and

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injunctions or the imposition of civil or criminal penalties.

The occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates and generate revenue and could require us to expend significant time and resources in response and could generate negative publicity.

The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be promulgated that could prevent, limit or delay marketing authorization of any product candidates we develop. We also cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may be subject to enforcement action and we may not achieve or sustain profitability.

The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.

The FDA and other regulatory authorities strictly regulates marketing, labeling, advertising and promotion of prescription drugs. These regulations include standards and restrictions for direct-to-consumer advertising, industry-sponsored scientific and educational activities, and promotional activities involving the internet and off-label promotion. For example, any regulatory approval that the FDA grants is limited to those specific diseases and indications for which a product is deemed to be safe and effective by FDA. While physicians in the United States may choose, and are generally permitted, to prescribe drugs for uses that are not described in the product’s labeling and for uses that differ from those tested in clinical trials and approved by the regulatory authorities, our ability to promote any products will be narrowly limited to those indications that are specifically approved by the FDA.

If we are found to have promoted such off-label uses, we may become subject to significant liability. The U.S. federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. If we cannot successfully manage the promotion any product candidates, if approved, we could become subject to significant liability, which would materially adversely affect our business, financial condition, results of operations and growth prospects.

Our employees, independent contractors, principal investigators, CROs, consultants, commercial partners, and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.

We are exposed to the risk of employee fraud or other misconduct or failure to comply with applicable regulatory requirements. Misconduct, errors, or omissions by employees and independent contractors, such as principal investigators, CROs, consultants, commercial partners, and vendors, could include failures to comply with regulations of the FDA and other comparable regulatory authorities, to provide accurate information to such regulators, to comply with manufacturing standards we have established, to comply with healthcare fraud and abuse laws, to report financial information or data accurately, to disclose unauthorized activities to us, or to comply with requirements of government contracts (e.g., the NIAID contract). In particular, sales, marketing, and other business arrangements in the healthcare industry are subject to extensive laws intended to prevent fraud, kickbacks, self-dealing, and other abusive practices. These laws may restrict or prohibit a wide range of business activities, including, but not limited to, research, manufacturing, distribution, pricing, discounting, marketing, and promotion, sales commission, customer incentive programs, and other business arrangements. Employee and independent contractor misconduct could also involve the improper use of individually identifiable information, including, without limitation, information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. In addition, federal procurement laws impose substantial penalties for misconduct in connection with government contracts and require certain contractors to maintain a code of business ethics and conduct. It is not always possible to identify and deter employee and independent contractor misconduct, and any precautions we take to detect and prevent improper activities may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws. If any such actions are instituted against us, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid, and other federal healthcare programs, contractual damages, reputational harm, diminished profits, and future earnings, additional reporting or oversight obligations if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with the law and curtailment, or restructuring of our operations, any of which could adversely affect our ability to operate.

If we successfully commercialize any of our product candidates, failure to comply with our reporting and payment obligations under U.S. governmental pricing programs could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

If we participate in the Medicaid Drug Rebate Program and/or Medicare Part D, if and when we successfully commercialize a product candidate, we will be required to report certain pricing information for such product candidate to the Centers for Medicare & Medicaid Services, the federal agency that administers the Medicaid and Medicare programs. We may also be required to report pricing information to the U.S. Department of Veterans Affairs. If we become subject to these reporting requirements, we will be liable for errors associated with our submission of pricing data, for failure to report pricing data in a timely manner, and for overcharging government payers, which can result in civil monetary penalties under the Medicaid statute, the federal civil False Claims Act, and other laws and regulations.

Our current and future relationships with healthcare professionals, principal investigators, consultants, customers, and third-party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, physician payment transparency and other healthcare laws and regulations, which could expose us to penalties.

Healthcare providers, physicians, and third-party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of any product candidates for which we obtain regulatory approval. Our current and future arrangements with healthcare professionals, principal investigators, consultants, customers, and third-party payors may expose us to broadly applicable fraud and abuse and other healthcare laws that may constrain the business or financial arrangements and relationships through which we research, sell, market, and distribute any product candidates for which we obtain regulatory approval. In addition, we may be subject to physician payment transparency laws and regulations by the federal government and by the states and foreign jurisdictions in which we conduct our business. The applicable federal, state, and foreign healthcare laws that may affect our ability to operate include the following:

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the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease or order, or the arranging for or recommending the purchase, lease or order of any good, facility, item or service, for which payment may be made, in whole or in part, under federal and state healthcare programs such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the federal Anti- Kickback Statute or specific intent to violate it in order to have committed a violation;

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federal civil and criminal false claims laws, including the federal False Claims Act, which impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making or causing to be made a false statement to avoid, decrease, or conceal an obligation to pay money to the federal government. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act;

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the federal civil monetary penalties statute, which imposes penalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent;

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HIPAA which created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of whether the payor is public or private, knowingly and willfully embezzling or stealing from a health care benefit program, willfully obstructing a criminal investigation of a health care offense and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

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the federal Physician Payments Sunshine Act, which requires manufacturers of certain drugs, devices, biologicals, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the Centers for Medicare & Medicaid Services (“CMMS”) information related to payments and “transfers of value” provided to physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors), certain other healthcare providers (such as nurse practitioners and physicians assistants) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and

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analogous state and foreign laws, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or to adopt compliance programs as prescribed by state laws and regulations, or that otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and local laws requiring the licensure of pharmaceutical sales representatives.

Efforts to ensure that our future business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal, and administrative penalties, including, without limitation, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid, and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, additional reporting or oversight obligations if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with the law and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and pursue our strategy. If any of the physicians or other healthcare providers or entities with whom we expect to do business, including future collaborators, are found not to be in compliance with applicable laws, they may be subject to criminal, civil, or administrative sanctions, including exclusions from participation in government healthcare programs, which could also affect our business.

Changes in healthcare policies, laws, and regulations may impact our ability to obtain approval for, or commercialize our product candidates, if approved.

In the United States and some foreign jurisdictions there have been, and continue to be, several legislative and regulatory changes and proposed reforms of the healthcare system in an effort to contain costs, improve quality, and expand access to care. In the United States, there have been and continue to be a number of healthcare-related legislative initiatives, as well as executive, judicial, and Congressional challenges to existing healthcare laws that have significantly affected, and could continue to significantly affect, the healthcare industry. For example, on June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (the “IRA”) into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025. The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program. In addition, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under government payor programs and review the relationship between pricing and manufacturer patient programs. For example, the IRA, among other things (i) directs the U.S. Department of Health and Human Services (“HHS”) to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions took effect progressively starting in fiscal year 2023. On August 29, 2023 HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges. HHS has and will continue to issue and update guidance as these programs are implemented. It is currently unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry. We expect that additional U.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal government will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.

At the state level, legislatures have become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access, and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Outside of the United States, particularly in the European Union, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of regulatory approval for a product. To obtain coverage and reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidates to other available therapies. If reimbursement of our product candidates is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be harmed.

We are subject to privacy and data security laws, rules, regulations, policies, industry standards, and contractual obligations, and our failure to comply with them could harm our business.

We maintain a large quantity of information, including confidential business information and information related to our employees and may maintain or have responsibility for the maintenance of personal information in connection with the conduct of our clinical trials. As such, we are subject to laws and regulations governing the privacy and security of such information. In the United States, there are numerous federal and state privacy and data security laws and regulations governing the collection, use, disclosure, and protection of personal information that apply or could apply to our operations or the operations of our partners, including federal and state health information privacy laws, federal and state security breach notification laws, and federal and state consumer protection laws. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues, in particular in relation to health information, which may affect our business and is expected to increase our compliance costs and exposure to liability. In addition, we may obtain health information from third parties, including research institutions from which we obtain clinical trial data, that are subject to privacy and security requirements under HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and the regulations promulgated thereunder. Depending on the facts and circumstances, we could be subject to significant penalties if we obtain, use or disclose individually identifiable health information in a manner that is not authorized or permitted by HIPAA.

Compliance with these and any other applicable privacy and data security laws, regulations and other requirements we may be subject to in the future is a rigorous and time-intensive process, and we may be required to put in place additional mechanisms ensuring compliance with such data protection rules. If we fail to comply with any such laws, regulations or other requirements, we may face significant fines and penalties that could adversely affect our business, financial condition, results of operations or growth prospects. Any failure or perceived failure by us or our third-party processors to comply with these data protection and privacy laws, regulations and requirements could result in significant government enforcement actions, which could include civil, criminal, and administrative penalties, orders requiring that we change our practices, claims for damages, and other liabilities, regulatory investigations and enforcement action, private litigation, significant costs (including in investigating and defending such claims, in remediation measures or changes to our operations), and adverse publicity, any of which could negatively affect our business, financial condition, results of operations and growth prospects. Furthermore, the laws are not consistent, and compliance in the event of a widespread data breach is costly. In addition, states are constantly adopting new laws or amending existing laws, requiring attention to frequently changing regulatory requirements.

With laws, regulations, and other obligations relating to privacy and data protection imposing new and relatively burdensome obligations, and with the substantial uncertainty over the interpretation and application of these and other obligations, we may face challenges in addressing their requirements and making necessary changes to our policies and practices and may incur significant costs and expenses in an effort to do so. We are currently in the process of developing and updating our policies and procedures in accordance with requirements under applicable data privacy and protection laws and regulations. We rely on our CROs to ensure compliance with data-privacy regulations that may arise in our trials. Other than our website privacy policy, we do not currently have any formal data privacy policies and procedures in place and have not completed formal assessments of whether we are in compliance with all applicable data privacy laws and regulations. Additionally, if third parties with which we work, such as vendors or service providers, violate applicable laws, rules or regulations or our policies, such violations may also put our or our clinical trial and employee data, including personal data, at risk, and our business, financial condition, results of operations and growth prospects may be adversely affected.

We are subject to U.S. and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws, and anti-money laundering laws and regulations. Compliance with these legal standards could impair our ability to compete in domestic and international markets. We can face criminal liability and other serious consequences for violations, which can harm our business.

We are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls, the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, and other state and national anti-bribery and anti-money laundering laws in the countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, contractors, and other collaborators from authorizing, promising, offering, or providing, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector.

We may engage third parties to sell any approved product candidates outside the United States, to conduct clinical trials, and/or to obtain necessary permits, licenses, patent registrations, and other regulatory approvals. We have direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities, and other organizations. We can be held liable for the corrupt or other illegal activities of our employees, agents, contractors, and other collaborators, even if we do not explicitly authorize or have actual knowledge of such activities. Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract, and fraud litigation, reputational harm, and other consequences.

We are also subject to export control, import, and trade sanctions laws and regulations which may restrict or prohibit altogether the provision, sale, or supply of our product candidates to certain governments, persons, entities, countries, and territories, including those that are the target of comprehensive sanctions or an embargo. Obtaining the necessary export license or other authorization for a particular transaction may be time-consuming and may result in the delay or loss of sales opportunities. Violations of U.S. export control, import, or sanctions laws and regulations can result in significant fines or penalties and possible incarceration for responsible employees and managers.

Risks Related to Ownership of Our Common Stock

Concentration of ownership of our common stock among our existing executive officers, directors, and principal stockholders may prevent new investors from influencing significant corporate decisions and matters submitted to stockholders for approval.

Our executive officers, directors, and current beneficial owners of 5% or more of our capital stock and their respective affiliates beneficially own, in the aggregate, a significant percentage of our outstanding common stock. As a result, these persons, acting together, would be able to significantly influence all matters requiring stockholder approval, including the election and removal of directors, any merger, consolidation, or sale of all or substantially all of our assets, or other significant corporate transactions. In addition, these persons, acting together, may have the ability to control the management and affairs of our company. Accordingly, this concentration of ownership may harm the market price of our common stock by:

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delaying, deferring, or preventing a change in control;

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entrenching our management and/or the board of directors (the “Board”);

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impeding a merger, consolidation, takeover, or other business combination involving us; or

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discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

In addition, some of these persons or entities may have interests different than yours. For example, because many of these stockholders purchased their shares at prices substantially below the price at which shares were sold in our IPO and recent financings and have held their shares for a longer period, they may be more interested in selling our company to an acquirer than other investors, or they may want us to pursue strategies that deviate from the interests of other stockholders.

A sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.

Sales of a substantial number of shares of our common stock in the public market could occur at any time. If our stockholders sell, or the market perceives that our stockholders intend to sell, substantial amounts of our common stock in the public market, the market price of our common stock could decline significantly.

We cannot predict what effect, if any, sales of our shares in the public market or the availability of shares for sale will have on the market price of our common stock. However, future sales of substantial amounts of our common stock in the public market, including shares issued upon exercise of outstanding options, or the perception that such sales may occur, could adversely affect the market price of our common stock.

We also expect that significant additional capital may be needed in the future to continue our planned operations. To raise capital, we may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.

Provisions in our corporate charter documents and under Delaware law, and the adoption of a rights plan, could make an acquisition of our company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our amended and restated certificate of incorporation and our amended and restated bylaws may discourage, delay or prevent a merger, acquisition, or other change in control of our company that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions also could limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because our Board is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board. Among other things, these provisions:

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establish a classified board of directors such that not all members of the Board are elected at one time;

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allow the authorized number of our directors to be changed only by resolution of our Board;

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limit the manner in which stockholders can remove directors from the Board;

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establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our Board;

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require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent;

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limit who may call stockholder meetings;

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authorize our Board to issue preferred stock without stockholder approval, which could be used to institute a stockholder rights plan, or so-called “poison pill,” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our Board; and

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require the approval of the holders of at least 66 2/3% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our charter or bylaws.

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”), which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired more than 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. These provisions could discourage potential acquisition proposals and could delay or prevent a change in control transaction. They could also have the effect of discouraging others from making tender offers for our common stock, including transactions that may be in your best interests. These provisions may also prevent changes in our management or limit the price that investors are willing to pay for our stock.

Additionally, in August 2024, we entered into a Rights Agreement, which was previously approved by the Board. In connection with the Rights Agreement, a dividend was declared of one preferred stock purchase right for each share of the Common Stock of the Company outstanding at the Record Date (individually, a “Right” and collectively, the “Rights”). Each Right entitles the registered holder thereof, after the Rights become exercisable and until August 15, 2025 (or the earlier redemption, exchange or termination of the Rights), to purchase from the Company one one-thousandth of a share of Series A Preferred, of the Company at a price of $6.50 per one one-thousandth of a share of Series A Preferred, subject to adjustment. The Rights will expire on August 15, 2025, subject to the Company’s right to extend such date, unless earlier redeemed or exchanged by the Company or terminated. The Rights Agreement could have the effect of discouraging, delaying or preventing a change in management or control over us. While there is no plan to do so at this time, our Board may choose to extend the current Rights Agreement or adopt a new rights agreement in the future.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States will be the exclusive forums for substantially all disputes between us and our stockholders, including claims under the Securities Act, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for:

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any derivative action or proceeding brought on our behalf;

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any action asserting a breach of fiduciary duty;

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any action asserting a claim against us or any of our directors, officers, employees, or agents arising under the DGCL, our amended and restated certificate of incorporation, or our amended and restated bylaws;

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any action or proceeding to interpret, apply, enforce, or determine the validity of our amended and restated certificate of incorporation, or our amended and restated bylaws; and

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any action asserting a claim against us or any of our directors, officers, employees, or agents that is governed by the internal-affairs doctrine.

Furthermore, our amended and restated certificate of incorporation also provides that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. However, these provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. In addition, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. To the extent the exclusive forum provision restricts the courts in which claims arising under the Securities Act may be brought, there is uncertainty as to whether a court would enforce such a provision. We note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

Any person purchasing or otherwise acquiring or holding any interest in shares of our capital stock is deemed to have received notice of and consented to the foregoing provisions. These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds more favorable for disputes with us or with our directors, officers, other employees or agents, or our other stockholders, which may discourage such lawsuits against us and such other persons, or may result in additional expense to a stockholder seeking to bring a claim against us. Alternatively, if a court were to find this choice of forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition, results of operations and growth prospects.

We will have broad discretion in the use of our cash, and may invest or spend our cash in ways with which you do not agree and in ways that may not increase the value of your investment.

Our management will have broad discretion in the application of our cash, and could spend our cash in ways that do not improve our results of operations or enhance the value of our common stock. The failure by our management to apply these funds effectively could result in financial losses that could have a negative impact on our business, cause the price of our common stock to decline, and delay the development of our pipeline programs as well as commercial preparedness.

We do not anticipate paying any cash dividends on our capital stock in the foreseeable future, and accordingly, stockholders must rely on capital appreciation, if any, for any return on their investment.

We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Instead, we plan to retain any earnings to maintain and expand our existing operations. In addition, any future credit facility or debt securities may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock. If we do not pay cash dividends, you could receive a return on your investment in our common stock only if you are able to sell your shares in the future and the market price of our common stock has increased when you sell your shares. As a result, investors seeking cash dividends should not purchase our common stock.

Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

As of December 31, 2023, we had federal and state net operating loss (“NOLs”) carryforwards of approximately $58.2 million and $122.6 million, respectively. Under the Tax Cuts and Jobs Act of 2017 (“the Tax Act”), as modified by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), our NOLs generated in tax years beginning after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOLs in tax years beginning after December 31, 2020, is limited to 80% of taxable income. There is variation in how states have responded and may continue to respond to the Tax Act or the CARES Act. In addition, under Sections 382 and 383 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes (such as research and development tax credits) to offset its post-change income or taxes may be limited. We may have experienced ownership changes in the past and may experience ownership changes in the future. As a result, our ability to use our pre-change NOLs and tax credits to offset post-change taxable income, if any, could be subject to limitations. Similar provisions of state tax law may also apply. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

General Risk Factors

The trading price of our common stock has been and may continue to be volatile.

The trading price of our common stock has been subject to wide fluctuations in response to various factors, some of which are beyond our control, including limited trading volume. The stock market in general and the market for biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may not be able to sell their shares at or above the price paid for the shares. In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Form 10-Q, these factors include:

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the commencement, enrollment or results of our planned and future clinical trials;

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the sufficiency of our existing cash to fund our future operating expenses and capital expenditure requirements;

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the results of our testing and clinical trials;

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unanticipated safety, tolerability or efficacy concerns;

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the loss of any of our key research, development or management personnel;

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regulatory or legal developments in the United States and other countries;

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the success of competitive products or technologies;

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adverse actions taken by regulatory agencies with respect to our clinical trials or manufacturers;

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changes or developments in laws or regulations applicable to our product candidates;

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changes to our relationships with collaborators, manufacturers, or suppliers;

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announcements concerning our competitors or the pharmaceutical industry in general;

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actual or anticipated fluctuations in our operating results;

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changes in financial estimates or recommendations by securities analysts;

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potential acquisitions;

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the results of our efforts to discover, develop, acquire, or in-license additional product candidates;

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the trading volume of our common stock on The Nasdaq Global Select Market;

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sales of our common stock by us, our executive officers and directors or our stockholders or the anticipation that such sales may occur in the future;

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general economic, political, and market conditions and overall fluctuations in the financial markets in the United States or other countries where we conduct critical business;

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stock market price and volume fluctuations of comparable companies and, in particular, those that operate in the biopharmaceutical industry;

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banking crises or failures; and

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investors’ general perception of us and our business.

These and other market and industry factors may cause the market price and demand for our common stock to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from selling their shares of our common stock at or above the price paid for the shares and may otherwise negatively affect the liquidity of our common stock. In addition, the stock market in general, and biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.

Some companies that have experienced volatility in the trading price of their shares have been the subject of securities class action litigation. Any lawsuit to which we are a party, with or without merit, may result in an unfavorable judgment. We also may decide to settle lawsuits on unfavorable terms. Any such negative outcome could result in payments of substantial damages or fines, damage to our reputation or adverse changes to our business practices. Defending against litigation is costly and time-consuming and could divert our management’s attention and our resources. Furthermore, during the course of litigation, there could be negative public announcements of the results of hearings, motions or other interim proceedings or developments, which could have a negative effect on the market price of our common stock.

If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business, or our market, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that equity research analysts publish about us and our business. We currently have research coverage by a limited number of equity research analysts. Equity research analysts may elect not to continue to provide research coverage of our common stock, and such lack of research coverage may adversely affect the market price of our common stock. We will not have any control over the analysts or the content and opinions included in their reports. The price of our shares could decline if one or more equity research analysts downgrade our shares or issue other unfavorable commentary or research about us. If one or more equity research analysts ceases coverage of us or fails to publish reports on us regularly, demand for our shares could decrease, which in turn could cause the trading price or trading volume of our common stock to decline.

We are incurring significantly increased costs as a result of operating as a company whose common stock is publicly traded in the United States, and our management is devoting substantial time to new compliance initiatives.

As a public company in the United States, we are incurring significant legal, accounting, and other expenses. These expenses will likely be even more significant after we no longer qualify as an emerging growth company. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq Stock Market LLC, and other applicable securities rules and regulations impose various requirements on public companies in the United States, including the establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our senior management and other personnel devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations has increased our legal and financial compliance costs and has made some activities more time-consuming and costly. We cannot predict or estimate the amount of additional costs we will incur or the timing of such costs.

However, these rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

Pursuant to Section 404, we will be required to furnish a report by our senior management on our internal control over financial reporting. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To prepare for eventual compliance with Section 404, we have engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, engage outside consultants, and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented, and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. Identifying material weaknesses could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

Significant disruptions of our or our vendors’ information technology systems or cybersecurity incidents could result in significant financial, legal, regulatory, business, and reputational harm to us.

We are increasingly dependent on information technology systems and infrastructure, including mobile technologies, to operate our business. In the ordinary course of our business, we collect, store, process, and transmit large amounts of confidential information, including intellectual property, proprietary business information, personal information (including health information), and other confidential information. It is critical that we do so in a secure manner to maintain the confidentiality, integrity, and restricted availability of such information. We have also outsourced elements of our operations, including elements of our information technology infrastructure and data processing, to third parties and, as a result, we manage a number of third-party vendors who have access to our computer networks or our information. In addition, many of those third parties in turn subcontract or outsource some of their responsibilities to other third parties. While all information technology operations are inherently vulnerable to inadvertent or intentional security breaches, incidents, attacks, and exposures, the accessibility and distributed nature of our information technology systems, and the information stored on those systems, make such systems (and the information stored therein) vulnerable to risks that threaten the confidentiality, integrity and availability of these systems and information, including unintentional or malicious, internal, and external attacks on our technology environment. Vulnerabilities can be exploited by diverse threat actors and attack vectors, including through inadvertent or intentional actions of our employees, third-party vendors, business partners, or by malicious third parties. Cybersecurity incidents are increasing in their frequency, levels of persistence, sophistication, and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives (including industrial espionage) and expertise, including organized criminal groups, “hacktivists,” nation states, and others, and utilizing increasingly sophisticated techniques and tools – including AI – that circumvent security controls, evade detection and remove or obfuscate forensic evidence. In addition to access to, loss of or the extraction of information, such attacks could involve the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering/phishing, malicious code embedded in software, and other means to affect service reliability and threaten the confidentiality, integrity, and availability of information technology systems or information. In addition, the prevalent use of mobile devices increases the risk of cybersecurity incidents.

Significant disruptions of our or our third-party vendors’ or business partners’ information technology systems or other similar cybersecurity incidents could adversely affect our business operations and result in the loss, misappropriation, and unauthorized access, use or disclosure of, or the prevention of access to, information, which could result in financial, legal, regulatory, business, and reputational harm to us. In addition, any impact to the confidentiality, integrity or availability of information technology systems and the information stored therein, whether from attacks on our or third-party technology environment or from computer viruses, natural disasters, terrorism, war, telecommunication and electrical failures, or other threats, could result in a material disruption of our development programs and our business operations. For example, the loss of clinical trial data from ongoing, completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. We cannot ensure that our cybersecurity and data protection efforts and our investment in information technology, or the efforts or investments of CROs, consultants or other third parties with which we work, will prevent breakdowns or breaches in our or their systems or other cybersecurity incidents, including those that cause loss, destruction, unavailability, alteration, dissemination of, or damage, or unauthorized access to, or processing of, our data, including personal information, assets, and other data processed or maintained on our behalf, that could have a material adverse effect upon our reputation, business, financial condition, results of operations and growth prospects.

While we have implemented security measures intended to protect our information technology systems and infrastructure, there can be no assurance that such measures will successfully prevent service interruptions or cybersecurity incidents or that our security measures and processes will be fully implemented, complied with or effective. Nor can we be certain that our third-party vendors or business partners have sufficient measures or processes in place to protect their information technology systems and infrastructure. We, our third-party vendors and business partners are, from time to time, subject to attacks and cybersecurity incidents. While we have not to our knowledge experienced an incident that has had a material impact on our operations or financial results, there is no way of knowing with certainty whether we have experienced any material cybersecurity incidents that have not been discovered. While we have no reason to believe this to be the case, attackers have become very sophisticated in the way they conceal access to systems, and many companies that have been attacked are not aware that their systems or information have been compromised. Any event that leads to unauthorized access, use, or disclosure of information, including personal information regarding our patients or employees, or other adverse impact to the availability, integrity or confidentiality of our information technology systems, infrastructure or information, could disrupt our business, harm our reputation, compel us to comply with applicable federal and state breach notification laws and foreign law and contractual equivalents, subject us to time-consuming, distracting, and expensive litigation (including class actions), regulatory investigation and oversight, mandatory corrective action, require us to verify the correctness of database contents, or otherwise subject us to liability under laws, regulations, and contractual obligations, including those that protect the privacy and security of personal information. It could also result in increased costs to us, including costs to investigate, mitigate and remediate vulnerabilities and incidents, and result in significant legal and financial exposure and reputational harm. In addition, any failure or perceived failure by us or our vendors or business partners to comply with our privacy, confidentiality, or data security-related legal or other obligations to third parties, or any further cybersecurity incidents, may result in governmental investigations, enforcement actions, regulatory fines, litigation, or public statements against us by advocacy groups or others, and could cause third parties, including clinical sites, regulators, or current and potential partners, to lose trust in us, or we could be subject to claims by third parties that we have breached our privacy- or confidentiality-related obligations. Moreover, cybersecurity incidents and other inappropriate access can be difficult to detect, and any delay in identifying them may lead to increased harm of the type described above. Finally, we cannot guarantee that any costs and liabilities incurred in relation to an incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all. Any of the foregoing could have a material adverse effect on our reputation, business, financial condition, results of operations and growth prospects.

We are an “emerging growth company” and as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, our common stock may be less attractive to investors.

We are an “emerging growth company” as defined in the JOBS Act. For so long as we remain an emerging growth company, we are permitted by SEC rules and plan to rely on exemptions from certain disclosure requirements that are applicable to other SEC-registered public companies that are not emerging growth companies. These exemptions include not being required to comply with the auditor attestation requirements of Section 404, not being required to comply with the auditor requirements to communicate critical audit matters in the auditor’s report on the financial statements, reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, the information we provide stockholders will be different than the information that is available with respect to other public companies. We have taken advantage of reduced reporting burdens in our Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q. In particular, in our Annual Reports on Form 10-K, we have provided only two comparative periods of audited financial statements. We also have not provided all of the executive compensation related information that would be required if we were not an emerging growth company. We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption and, therefore, we will not be subject to the same requirements to adopt new or revised accounting standards as other public companies that are not “emerging growth companies.”

Recent and potential future changes to U.S. and non-U.S. tax laws could materially adversely affect our company.

Existing, new, or future changes in tax laws, regulations, and treaties, or the interpretation thereof, in addition to tax policy initiatives and reforms under consideration in the United States or internationally and other initiatives could have an adverse effect on the taxation of international businesses. Furthermore, countries where we are subject to taxes, including the United States, are independently evaluating their tax policy and we may see significant changes in legislation and regulations concerning taxation. For example, the Tax Act, the CARES Act and the recently enacted IRA made many significant changes to the U.S. tax laws. The Tax Act made broad and complex changes to the Code, including, among other things, reducing the federal corporate tax rate. Additionally, beginning in 2022, the Tax Act required the capitalization of research and experimentation expenses with amortization periods over five and fifteen years pursuant to Code Section 174 (“Section 174”), which could impact our effective tax rate and cash flow. Future guidance from the U.S. Internal Revenue Service and other tax authorities with respect to any such tax legislation may affect us, and certain aspects of the previously enacted legislation could be repealed or modified in future legislation. In addition, it is uncertain if and to what extent various states will conform to the Tax Act, the CARES Act, the IRA, or any newly enacted federal tax legislation. Other legislative changes could also affect the taxation of holders of our common stock. We are unable to predict what tax reform may be proposed or enacted in the future or what effect such changes would have on our business, but such changes, to the extent they are brought into tax legislation, regulations, policies or practices, could affect our effective tax rates in the future in countries where we are subject to tax and have an adverse effect on our overall tax rate in the future, along with increasing the complexity, burden, and cost of tax compliance. We urge our stockholders to consult with their legal and tax advisors with respect to any such legislative changes and the potential tax consequences of investing in or holding our common stock.

Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement, data protection, and other losses.

Our agreements with third parties may include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement or other liabilities relating to or arising from our contractual obligations. Large indemnity payments could harm our business, financial condition, results of operations and growth prospects. Although we normally contractually limit our liability with respect to such obligations, we may still incur substantial liability. Any dispute with a third party with respect to such obligations could have adverse effects on our relationship with that third party and relationships with other existing or new partners, harming our business.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities

None.

Use of Proceeds from Public Offering of Common Stock

On March 24, 2022, our registration statement on Form S-1 (File No. 333-263295) was declared effective by the SEC for our IPO. There has been no material change in the use of proceeds from our IPO as described in our final prospectus dated March 24, 2022 pursuant to Rule 424(b)(4).

Issuer Purchases of Equity Securities

None.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

During the fiscal quarter ended September 30, 2024, none of our directors or officers (as defined in Section 16 of the Securities Exchange Act of 1934, as amended) adopted, modified, or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement,” as defined in Item 408(c) of Regulation S-K.

Item 6. Exhibit

(a)

Exhibits.

The exhibits listed below are filed as part of this Quarterly Report on Form 10-Q.


		Incorporated by Reference
Exhibit Number	Description	Form	File No.	Exhibit	Filing Date
3.1	Amended and Restated Certificate of Incorporation.	8-K	001-41331	3.1	June 24, 2024
3.2	Amended and Restated Bylaws.	S-1	333-263295	3.4	March 4, 2022
3.3	Certificate of Designations of Series A Junior Participating Preferred Stock of AN2 Therapeutics, Inc. filed with the Secretary of State of the State of Delaware on August 15, 2024.	8-K	001-41331	3.1	August 19, 2024
4.1	Rights Agreement, dated as of August 15, 2024, between AN2 Therapeutics, Inc. and Equiniti Trust Company, LLC, which includes Form of Certificate of Designations of Series A Junior Participating Preferred Stock as Exhibit A, the Form of Right Certificate as Exhibit B and the Summary of Rights to Purchase Preferred Stock as Exhibit C.	8-K	001-41331	4.1	August 19, 2024
31.1*	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*†	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*†	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document**
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document**
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document**
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

** The following materials are formatted in Inline XBRL (Extensible Business Reporting Language): (i) the cover page; (ii) the Condensed Balance Sheets as of September 30, 2024 and December 31, 2023; (iii) the Condensed Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2024 and 2023; (iv) the Condensed Statements of Stockholders' Equity for the three and nine months ended September 30, 2024 and 2023; (vi) the Condensed Statements of Cash Flows for the nine months ended September 30, 2024 and 2023; (vii) Notes to Condensed Financial Statements tagged as blocks of text.

† The certification attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Quarterly Report on Form 10-Q is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on November 13, 2024.


		AN2 Therapeutics, Inc.

		By:	/s/ Eric Easom
			Eric Easom
			Chief Executive Officer and Director (Principal Executive Officer)

		By:	/s/ Lucy O. Day
			Lucy O. Day
			Chief Financial Officer
			(Principal Financial Officer and Principal Accounting Officer)