CNS Pharmaceuticals (CNSP) risk factors, FY2024 10-K

Risks Related to the Company’s Business and Industry

1. 01We will require substantial funding to complete our clinical trials, which may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce or cease our operations
2. 02The report of our independent registered public accounting firm expresses substantial doubt about our ability to continue as a going concern. Such “going concern” opinion could impair our ability to obtain financing
3. 03Our success depends greatly on the success of TPI 287 and Berubicin’s development for the treatment of glioblastoma, and our pipeline of product candidates beyond this lead indication is extremely early stage and limited
4. 04We have a limited operating history and we expect a number of factors to cause our operating results to fluctuate on an annual basis, which may make it difficult to predict our future performance
5. 05Our business currently depends largely on the successful development and commercialization of TPI 287 and Berubicin. Our ability to generate revenue related to product sales, if ever, will depend on the successful development and regulatory approval of TPI 287 and Berubicin for the treatment of glioblastoma
6. 06Delays in the commencement, enrollment and completion of clinical trials could result in increased costs to us and delay or limit our ability to obtain regulatory approval for TPI 287 and Berubicin and our other product candidates
7. 07We have never completed a clinical trial or submitted an NDA before, and any product candidate we advance through clinical trials may not have favorable results in later clinical trials or receive regulatory approval
8. 08If TPI 287 and Berubicin is found to be unsafe or lack efficacy, we will not be able to obtain regulatory approval for it and our business would be materially and possibly irreparably harmed
9. 09Interim or 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
10. 10Our product candidates may have undesirable side effects that may delay or prevent marketing approval, or, if approval is received, require them to be taken off the market, require them to include safety warnings or otherwise limit their sales
11. 11We have no sales, marketing or distribution experience and we will have to invest significant resources to develop those capabilities or enter into third-party sales and marketing arrangements, the problems with which could materially harm our business at any time
12. 12We may not be successful in establishing and maintaining development and commercialization collaborations, which could adversely affect our ability to develop certain of our product candidates and our financial condition and operating results
13. 13We face competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively
14. 14We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights
15. 15We may be subject to claims that our employees and contractors have wrongfully used or disclosed alleged trade secrets of their former employers
16. 16If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and products could be significantly diminished
17. 17We will need to expand our operations and increase the size of our Company, and we may experience difficulties in managing growth
18. 18We may not be able to manage our business effectively if we are unable to attract and retain key personnel and consultants
19. 19Our chief science officer is currently working for us on a part-time basis. Our chief executive officer and chief science officer, also provide services for other companies in our industry and such other positions may create conflicts of interest for such officers in the future
20. 20We do not expect that our insurance policies will cover all of our business exposures thus leaving us exposed to significant uninsured liabilities
21. 21Although dependent on certain key personnel, we do not have any key man life insurance policies on any such people
22. 22There are limited suppliers for active pharmaceutical ingredients (“API”) used in our drug candidates. Problems with the third parties that manufacture the API used in our drug candidates, or in the supply chain between the manufacturer and CNS, may delay our clinical trials or subject us to liability
23. 23We may not be able to recover from any catastrophic event affecting our suppliers
24. 24We may be materially adversely affected in the event of cyber-based attacks, network security breaches, service interruptions, or data corruption
25. 25Our cash and cash equivalents could be adversely affected if the financial institutions in which we hold our cash and cash equivalents fail

Risks Related to Our Common Stock

1. 26Failure to maintain effective internal control over our financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act has caused and may cause in the future our financial reports to be inaccurate
2. 27Failure to continue improving our accounting systems and controls could impair our ability to comply with the financial reporting and internal controls requirements for publicly traded companies
3. 28Our current stockholders’ ownership may be diluted if additional capital stock is issued to raise capital, to finance acquisitions or in connection with strategic transactions
4. 29We may be required to repurchase certain of our warrants upon a fundamental transaction, which may prevent or deter a third party from acquiring us
5. 30As a biotechnology company, we may be at an increased risk of securities class action litigation
6. 31If securities or industry analysts do not publish research or reports about us, or if they adversely change their recommendations regarding our common stock, then our stock price and trading volume could decline
7. 32As an “emerging growth company” under the Jumpstart Our Business Startups Act, or JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements
8. 33We intend to take advantage of all of these reduced reporting requirements and exemptions, other than the longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act