Cerenome (CNSY) risk factors, FY2024 10-K

Risks Related to our Financial Position and Capital Requirements

1. 01We have incurred losses since inception, we expect to incur significant net losses in the foreseeable future and we may never become profitable and our operating results have been and will likely continue to be volatile
2. 02our success at commercializing our CNSideTM Portfolio
3. 03Uncertainties relating to our ability to fund our operations for at least the next 12 months raises substantial doubt about our ability to continue as a going concern
4. 04We could be delisted from Nasdaq for failure to comply with the minimum stockholders’ equity continued listing requirement or other applicable continued listing requirements and standards of Nasdaq, which would seriously harm the liquidity of our stock and our ability to raise capital
5. 05The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our clinical development efforts
6. 06Borrowings under our line of credit have the effect of limiting our use of cash and marketable securities
7. 07We maintain our cash at financial institutions, often in balances that exceed federally insured limits
8. 08Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited

Risks Related to Our Business and Industry

1. 09If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired
2. 10Our future success is in large part dependent upon our ability to successfully develop our nanomedicine platform and commercialize REYOBIQ™ and 188RNL-BAM and any failure to do so could significantly harm our business and prospects
3. 11or if we do obtain such capital, that our development, manufacturing, and commercialization efforts would be successful; and
4. 12188RNL-BAM was developed and tested preclinically as a drug product. The FDA has informed us that 188RNL-BAM will, moving forward, be regulated instead as a medical device
5. 13We recently acquired the CNSideTM Portfolio, and we may not be successful in our efforts to develop, fully utilize and monetize it
6. 14If we are unable to successfully partner with other companies to commercialize our product candidates, our business could materially suffer
7. 15Our success depends in substantial part on our ability to obtain regulatory approvals for our RNL product candidates. However, we cannot be certain that we will receive regulatory approval for these product candidates or our other product candidates
8. 16If we or any party to a key collaboration, licensing, development, acquisition or similar arrangement fail to perform material obligations, or commit a breach, under such arrangement, or any arrangement is terminated for any reason, there could be an adverse effect on our business
9. 17whether and the extent to which inventors are able to contest the assignment of their rights to our licensors
10. 18Our current business strategy is high-risk and may not be successful
11. 19Reliance on government funding for our programs may impose requirements that limit our ability to take certain actions, and subject it to potential financial penalties, which could materially and adversely affect our business, financial condition and results of operations
12. 20The DoD Award is dependent on continued U.S. government funding and government appropriations, which may not be forthcoming on a timely basis or at all
13. 21If our competitors market or develop products that are marketed more effectively, approved more quickly than our product candidates, or demonstrated to be safer or more effective than our product candidates, our commercial opportunities could be reduced or eliminated
14. 22resources, experience and expertise in prosecution and enforcement of intellectual property rights
15. 23Product development involves a lengthy and expensive process, with an uncertain outcome. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates
16. 24a regulatory agency may put a clinical study on hold pending additional safety data (and there can be no assurance that we will be able to satisfy the regulator agencies’ requests in a timely manner, which can lead to significant uncertainty in the completion of a clinical study)
17. 25Pre-clinical studies and preliminary and interim data from clinical trials of our product candidates are not necessarily predictive of the results or success of ongoing or future clinical trials of our product candidates
18. 26Because we have limited resources, we may decide to pursue a particular product candidate and fail to advance product candidates that later demonstrate a greater chance of clinical and commercial success
19. 27Clinical trial results may fail to support approval of our product candidates
20. 28If third parties we engage are not able to successfully perform, we may not be able to successfully complete clinical development, obtain regulatory approval or commercialize our product candidates and our business could be substantially harmed
21. 29a third-party manufacturer may gain knowledge from working with us that could be used to supply one of our competitors with a product that competes with ours
22. 30We may have difficulty enrolling, or fail to enroll patients, in our clinical trials, which could delay or prevent clinical trials of our drug candidates
23. 31If a particular product candidate causes significant adverse events, then we may be unable to receive regulatory approval or market acceptance for such product candidate
24. 32If our product candidates and technologies receive regulatory approval but do not achieve broad market acceptance, especially by physicians, the revenue that we generate will be limited
25. 33pricing and cost effectiveness
26. 34All potential applications of our product candidates are investigational, which subjects us to development and marketing risks
27. 35The worldwide regulatory process for our nanomedicine drug candidates can be lengthy and expensive, with no guarantee of approval
28. 36We will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant expense, and if we or our collaborators fail to comply with such requirements, regulatory agencies may take action against us or them, which could significantly harm our business
29. 37The future regulatory processes that will be applicable to Laboratory Developed Tests (LDTs) are uncertain and may prevent us from obtaining required authorizations for the commercialization of our products and/or introduce additional costs associated with those products
30. 38Increased regulatory oversight resulting in delays for product launch
31. 39Changing, new and/or emerging government regulations, including healthcare legislative reform measures, may adversely affect us
32. 40Adequate coverage and reimbursement from third party payors may not be available for our product candidates, which could diminish our sales or adversely affect our ability to sell our products profitably
33. 41Orphan drug designation may not ensure that we will enjoy market exclusivity in a particular market, and if we fail to obtain or maintain orphan drug designation or other regulatory exclusivity for some of our product candidates, our competitive position would be harmed
34. 42If we experience an interruption in supply from a material sole source supplier, our business may be harmed
35. 43We may engage in strategic transactions that could impact our liquidity, increase our expenses, and present significant distractions to our management
36. 44inability to retain key employees of any acquired businesses
37. 45We must maintain quality controls and compliance with manufacturing standards
38. 46If we are unable to identify, hire and/or retain key personnel, we may not be able to sustain or grow our business
39. 47highly complex process that requires significant experience and know-how. If we are unable to attract personnel with the necessary skills and experience to reestablish and expand our nanomedicine business, which is currently conducted out of our Houston, Texas facility, our business could suffer
40. 48We face potential product liability exposure, and if successful claims are brought against us, we may incur substantial liability if our insurance coverage for those claims is inadequate
41. 49A failure to adequately protect health information could result in severe harm to our reputation and subject us to significant liabilities, each of which could have a material adverse effect on our business
42. 50We and our collaborators must comply with environmental laws and regulations, including those pertaining to use of hazardous and biological materials in our business, and failure to comply with these laws and regulations could expose us to significant liabilities
43. 51We recently acquired the CNSideTM diagnostic portfolio, and we may not be successful in our efforts to develop, fully utilize and monetize it
44. 52Clinical laboratories are highly regulated and if we are unable to maintain compliance with these regulations, or if the regulations change in ways that make it more difficult or costly to comply, our financial condition and our business may be harmed

Risks Relating to Our Intellectual Property

1. 53Our success depends in part on our ability to protect our intellectual property
2. 54the patents of others may have an adverse effect on our business
3. 55We may not be able to protect our trade secrets
4. 56We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers
5. 57We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights, and we may be unable to protect our rights to our product candidates and technology
6. 58If we are sued for infringing intellectual property rights of third parties, it will be costly and time consuming, and an unfavorable outcome in that litigation would have a material adverse effect on our business

Risks Relating to the Issuances of Capital Stock, the Securities Markets and an Investment in our Common Stock

1. 59Our stockholders may experience substantial dilution in the value of their investment if we issue additional shares of our capital stock
2. 60Our certificate of incorporation allows us to issue up to 100,000,000 shares of our common stock and to issue and designate the rights of, without stockholder approval, up to 5,000,000 shares of preferred stock
3. 61Stockholders will suffer substantial additional dilution if certain provisions in the outstanding March 2025 Warrants are utilized
4. 62There are a large number of shares of common stock underlying our outstanding Warrants and Prefunded Warrants and the sale of these shares may depress the market price of our common stock and cause immediate and substantial dilution to our existing stockholders
5. 63The market price of our common stock may be volatile and fluctuate significantly, which could result in substantial losses for stockholders
6. 64the trading volume of our common stock
7. 65We may be or become the target of securities litigation, which is costly and time-consuming to defend
8. 66We may issue debt and equity securities or securities convertible into equity securities, any of which may be senior to our common stock as to distributions and in liquidation, which could negatively affect the value of our common stock
9. 67Our charter documents contain anti-takeover provisions
10. 68limit who may call stockholder meetings
11. 69We presently do not intend to pay cash dividends on our common stock
12. 70If securities and/or industry analysts fail to continue publishing research about our business, if they change their recommendations adversely, or if our results of operations do not meet their expectations, our stock price and trading volume could decline
13. 71Increased information technology security threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, and products