What the changes say
- The company completely shifted its strategy from pharmaceutical development to laser-based computing for blockchain and high-performance computing.
- It faces severe operational risks due to having only two full-time employees and early-stage prototypes like the qc-LPU100.
- Financing risks and restrictive covenants under Series G and H agreements threaten ongoing operations and capital-raising ability.
What changed since the prior 10-K
New
- NewRisks Related to our Business
We have recently shifted our business strategy from pharmaceutical development to laser-based computing for blockchain and high-performance computing, and we may not successfully develop, validate or commercialize our new technology
We shifted our strategy to laser-based computing for blockchain using qc-LPU100 prototypes that are unproven and lack regulatory certifications.
- NewRisks Related to our Business
We may require significant additional capital to develop the qc-LPU100, finance pilot deployments and other development efforts, and execute our hardware commercialization plan, and we may be unable to obtain such capital on acceptable terms or at all
We require significant additional capital to develop the qc-LPU100 and finance pilot deployments amid cryptocurrency market volatility.
- NewRisks Related to our Business
Our primary source for developing qc-LPU100 and LPU prototypes is through a licensing partnership, and therefore the Company is dependent upon maintaining and increasing the number of licensing agreements and developing annual recurring revenues through those partnerships, in order to continue to develop its business
We depend on maintaining a licensing partnership to develop LPU prototypes and generate recurring revenues.
- NewRisks Related to our Business
Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate
Our market opportunity estimates and growth forecasts for quantum-class laser computing may prove inaccurate.
- NewRisks Related to our Business
In order to compete, we must attract, retain and motivate key associates, and the failure to do so could have an adverse effect on our business, financial condition and results of operations
We must attract, retain, and motivate key technical associates in a highly competitive market.
- NewRisks Related to our Business
We have a very limited workforce and are highly dependent on a small number of individuals to execute our business strategy, which exposes us to significant operational risk
We have only two full-time employees and rely heavily on third-party contractors to execute our business strategy.
- NewRisks Related to our Business
The quantum computing industry is competitive and we may not be successful in competing in this industry or establishing and maintaining confidence in our long-term business prospects among current and future partners and customers
We face intense competition in the rapidly evolving quantum computing industry from better-funded companies and foreign sovereign-funded research organizations.
- NewRisks Related to our Business
Even if we are successful in developing qc-LPU100 and LPU prototypes, competitors in the industry may achieve technological breakthroughs that render our systems obsolete or inferior to other technology
Competitors may achieve technological breakthroughs that render our LPU systems obsolete.
- NewRisks Related to our Business
The quantum-class laser computing industry is in its early stages and volatile, and if it does not develop, if it develops slower than we anticipate, if it encounters negative publicity or if quantum computing products and services generally do not achieve commercial adoption, the growth of our business will be harmed
The market for quantum-class laser computing is nascent, volatile, and subject to potential negative publicity or slow adoption.
- NewRisks Related to our Business
The cryptocurrency and blockchain markets are highly volatile, and a sustained downturn in cryptocurrency prices or demand could materially reduce the market for our laser-based computing products
A sustained downturn in volatile cryptocurrency and blockchain markets could significantly reduce demand for our laser-based computing products.
- NewRisks Related to our Business
Unfavorable conditions in our industries or the global economy could limit our ability to grow our business and negatively affect our results of operations
Unfavorable global economic conditions, inflation, and trade relations could delay customer purchases and development progress.
- NewRisks Related to Our Legacy Pharmaceutical Business
Our legacy pharmaceutical product candidates, Isomyosamine and Supera-CBD, are subject to extensive clinical development, regulatory approval, and commercialization risks that could reduce the value of these assets
Our legacy pharmaceutical product candidates, Isomyosamine and Supera-CBD, face lengthy and uncertain clinical development and regulatory risks.
- NewRisks Related to Our Legacy Pharmaceutical Business
Any legacy pharmaceutical product candidate that obtains marketing approval would be subject to extensive post-marketing regulatory requirements, and could be subject to restrictions or withdrawal from the market
- NewRisks Related to Our Legacy Pharmaceutical Business
The commercial viability of our legacy pharmaceutical product candidates is dependent on market acceptance, pricing, reimbursement, and competition, any of which could reduce the value of these assets
- NewRisks Related to Our Legacy Pharmaceutical Business
The Company’s legacy pharmaceutical operations are subject to healthcare laws and regulations, including anti-kickback, fraud and abuse, and healthcare reform legislation, which could affect the value of these pharmaceutical assets
- NewRisks Related to Our Legacy Pharmaceutical Business
Our legacy pharmaceutical operations involve the use of hazardous materials, and we are subject to environmental, health, and safety laws and regulations
- NewRisks Related to Government Regulation
Our focus on blockchain and cryptocurrency infrastructure exposes us to regulatory, cybersecurity, and market risks that could materially impact adoption of our technology
- NewRisks Related to Government Regulation
We may be subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable laws
- NewRisks Related to Government Regulation
We expect to incur significant costs in complying with these regulations. Regulations related to quantum computing and LPU technology are currently evolving and we face risks associated with changes to these regulations
- NewRisks Related to Our Intellectual Property
Our business depends on our exclusive global licensing agreement with LightSolver, and loss of access to this technology or disputes regarding intellectual property could materially and adversely affect our operations
- NewRisks Related to Our Preferred Stock
Our ability to make payments due to the holders of our Series H Preferred Stock and Series G Preferred Stock using cash is also limited by the amount of cash we have on hand at the time such payments are due as well as certain provisions of the DGCL
- NewRisks Related to Our Preferred Stock
The Series H Certificate of Designations and Series G Certificate of Designations contains restrictive covenants and terms that may make it difficult to procure additional financing and that may affect our financial condition and results of operations
- NewRisks Related to Our Preferred Stock
Current market and economic conditions in one or more of our markets could impact our ability to grow our business
Dropped
- DroppedRisks Related to our Business
Our financial statements have been prepared on a going concern basis; we must raise additional capital to fund our operations in order to continue as a going concern
Going concern doubt expressed by auditor Morison Cogen LLP due to recurring losses.
- DroppedRisks Related to our Business
The concentration of the capital stock ownership with insiders of the Company will likely limit the ability of our stockholders to influence corporate matters
- DroppedRisks Related to our Business
We must attract and retain highly skilled employees to succeed
- DroppedRisks Related to our Business
We operate in a highly competitive industry
- DroppedRisks Related to our Business
If we fail to comply with environmental, health, and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business
Concentration of capital stock ownership with insiders limiting stockholder influence.
- DroppedRisks Related to our Business
Although we maintain workers’ compensation insurance to cover us for costs and expenses, we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities
- DroppedRisks Related to our Product Development and Regulatory Approval
Clinical drug development is a lengthy, expensive, and inherently uncertain process, and we may experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates
- DroppedRisks Related to our Product Development and Regulatory Approval
If we are unable to develop, obtain regulatory approval for and commercialize Isomyosamine, Supera-CBD or other future product candidates, or if we experience significant delays in doing so, our business will be materially harmed
Requirement to recruit and retain qualified clinical and scientific personnel.
- DroppedRisks Related to our Product Development and Regulatory Approval
We may not have the resources to conduct clinical protocols sufficient to yield data suitable for publication in peer-reviewed journals and our inability to do so in the future could have an adverse effect on marketing our products effectively
Intense competition from large pharmaceutical and biotechnology companies.
- DroppedRisks Related to our Product Development and Regulatory Approval
Success in pre-clinical studies and earlier clinical trials for our product candidates may not be indicative of the results that may be obtained in later clinical trials, including our Phase 2 clinical trial for Isomyosamine, which may delay or prevent obtaining regulatory approval
Compliance risks regarding environmental, health, and safety laws for hazardous materials.
- DroppedRisks Related to our Product Development and Regulatory Approval
Even if we complete the necessary pre-clinical studies and clinical trials, we cannot predict when, or if, we will obtain regulatory approval to commercialize a product candidate and the approval may be for a narrower indication than we seek
Inadequacy of workers compensation insurance for hazardous material injuries.
- DroppedRisks Related to our Product Development and Regulatory Approval
The FDA may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of any approved product
- DroppedRisks Related to our Product Development and Regulatory Approval
Our failure to obtain regulatory approval in international jurisdictions would prevent us from marketing our product candidates outside the U.S
Lengthy and uncertain FDA drug development and clinical trial processes.
- DroppedRisks Related to our Product Development and Regulatory Approval
Our development program for Supera-CBD, a synthetic analog of CBD, is in its infancy and subject to substantial uncertainty and may not yield commercial results and is subject to significant regulatory risks
Risks of failing to develop, approve, and commercialize Isomyosamine and Supera-CBD.
- DroppedRisks Related to our Product Development and Regulatory Approval
Further, the success of our prospective Supera-CBD candidate, if any, is subject to a number of constantly-evolving state and federal laws, regulations, and enforcement policies pertaining to the use of CBD
Lack of resources to conduct clinical protocols for peer-reviewed journal publication.
- DroppedRisks Related to our Product Development and Regulatory Approval
Negative public perception of cannabis-related businesses, misconceptions about the nature of our business or Supera-MD, and regulatory uncertainties relating to the legality of cannabinoids could each have a material adverse effect on our business, financial condition, and results of operations
Unpredictability of success in later-stage clinical trials for Isomyosamine.
- DroppedRisks Related to Commercialization and Manufacturing
The commercial success of our product candidates, including Isomyosamine and Supera-CBD, will depend upon their degree of market acceptance by providers, patients, patient advocacy groups, third-party payors and the general medical community
Uncertainty and expense of obtaining FDA approval for drug candidates.
- DroppedRisks Related to Commercialization and Manufacturing
The pricing, insurance coverage and reimbursement status of newly approved products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for our product candidates, if approved, could limit our ability to market those products and decrease our ability to generate product revenue
Potential FDA requirements for costly post-marketing studies and surveillance.
- DroppedRisks Related to Commercialization and Manufacturing
Several companies are focused on developing treatments for immunometabolic dysregulation in treatment of autoimmune disorders
- DroppedRisks Related to Government Regulation
We could be adversely affected if healthcare reform measures substantially change the market for medical care or healthcare coverage in the U.S
- DroppedRisks Related to Government Regulation
We are subject to inspection and market surveillance by the FDA to determine compliance with regulatory requirements. If the FDA finds that we have failed to comply, the agency can institute a wide variety of enforcement actions which may materially affect our business operations
- DroppedRisks Related to Government Regulation
The FDA’s ability to review and approve new products may be hindered by a variety of factors, including budget and funding levels, ability to hire and retain key personnel, statutory, regulatory and policy changes and global health concerns
- DroppedRisks Related to Our Intellectual Property
Our success largely depends on our ability to obtain, maintain and protect our intellectual property. It is difficult and costly to protect our proprietary rights and technology, and we may not be able to ensure their adequate protection
- DroppedRisks Related to Our Intellectual Property
Our potential strategy of obtaining rights to key technologies through in-licenses may not be successful
- DroppedRisks Related to Our Intellectual Property
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
- DroppedRisks Related to Our Intellectual Property
We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers
- DroppedRisks Related to Our Intellectual Property
We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming and unsuccessful and could result in a finding that such patents are unenforceable or invalid
- DroppedRisks Related to Our Intellectual Property
We have limited foreign intellectual property rights and may not be able to protect our intellectual property rights throughout the world
- DroppedRisks Related to Our Intellectual Property
Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
- DroppedRisks Related to Our Intellectual Property
As is the case with other pharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the pharmaceutical industry involves both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain
- DroppedRisks Related to Our Intellectual Property
Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time
- DroppedRisks Related to Our Intellectual Property
If we do not obtain patent term extension for any product candidates we may develop, our business may be materially harmed
Reworded
- 100% rewrittenRisks Related to our Business
Our limited operating history related to our laser-based computing technology may make it difficult to evaluate the success of our business to date and to assess our future viability
Updated operating history risk from pharmaceutical R&D to focus on forecasting uncertainties and technical roadmap execution for the qc-LPU100.
Was: Our limited operating history may make it difficult to evaluate the success of our business to date and to assess our future viability
- 77% rewrittenRisks Related to Our Preferred Stock
Under the Series H Purchase Agreement and Series G Purchase Agreement, we are subject to certain restrictive covenants that may make it difficult to procure additional financing
Replaced Series F restrictive covenants with Series H Purchase Agreement covenants restricting dilutive issuances and anti-dilution adjustments without stockholder approval.
Was: Under the February 2023 SPA, the Series F-1 Purchase Agreement and Series G Purchase Agreement we are subject to certain restrictive covenants that may make it difficult to procure additional financing
- 76% rewrittenRisks Related to Our Intellectual Property
Third-party claims of intellectual property infringement may prevent, delay or otherwise interfere with our business operations
Added a hedge noting that although transitioning away from pharmaceuticals, past development activities for product candidates still risk third-party IP infringement claims.
Was: Third-party claims of intellectual property infringement may prevent, delay or otherwise interfere with our product discovery and development efforts
- 63% rewrittenRisks Related to Our Preferred Stock
Offers or availability for sale of a substantial number of shares of our Common Stock may cause the price of our Common Stock to decline
Updated common stock sales risk to emphasize that potential resale availability alone impairs future equity financing capabilities.
- 38% rewrittenRisks Related to our Business
The market price of our Common Stock has been and may continue to be subject to significant fluctuations and volatility, and the stockholders of the Company may be unable to resell their shares at a profit and may incur losses
Removed life sciences industry references and added quantum computing factors causing common stock price volatility.
- 33% rewrittenRisks Related to Our Preferred Stock
We may be subject to securities litigation in the future
Removed specific references to prior litigation history and focused broadly on potential securities class action risks and insurance gaps.
Was: We have been subject to a number of securities litigations, and we may be subject to similar or other litigation in the future
- 28% rewrittenRisks Related to our Business
Our largest stockholder maintains the ability to significantly influence all matters submitted to our stockholders for approval
Updated PharmaCyte Biotech's beneficial ownership stake from approximately 88.64% down to more than 10%.
- 28% rewrittenRisks Related to Our Preferred Stock
If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted
Retained Nasdaq continued listing requirements of $2.5 million minimum stockholders equity and $1.00 minimum bid price.
- 22% rewrittenRisks Related to Our Intellectual Property
We may not be able to adequately protect or enforce our intellectual property rights, which could harm our competitive position
- 21% rewrittenRisks Related to Our Preferred Stock
If securities analysts do not publish research or reports about our business, or if they publish negative evaluations, the price of our Common Stock could decline
All 42 risk factors
Headings as the filing states them, in filing order.
Risks Related to our Business
- 01Any additional capital raised through the sale of equity or equity-backed securities may dilute our stockholders’ ownership percentages and could also result in a decrease in the market value of our equity securities
- 02We have recently shifted our business strategy from pharmaceutical development to laser-based computing for blockchain and high-performance computing, and we may not successfully develop, validate or commercialize our new technologyNew
- 03We may require significant additional capital to develop the qc-LPU100, finance pilot deployments and other development efforts, and execute our hardware commercialization plan, and we may be unable to obtain such capital on acceptable terms or at allNew
- 04Our primary source for developing qc-LPU100 and LPU prototypes is through a licensing partnership, and therefore the Company is dependent upon maintaining and increasing the number of licensing agreements and developing annual recurring revenues through those partnerships, in order to continue to develop its businessNew
- 05The market price of our Common Stock has been and may continue to be subject to significant fluctuations and volatility, and the stockholders of the Company may be unable to resell their shares at a profit and may incur losses38% rewritten
- 06Our limited operating history related to our laser-based computing technology may make it difficult to evaluate the success of our business to date and to assess our future viability100% rewritten
- 07Our estimates of market opportunity and forecasts of market growth may prove to be inaccurateNew
- 08Certain stockholders could attempt to influence changes within the Company, which could adversely affect our operations, financial condition and the value of our Common Stock
- 09Our largest stockholder maintains the ability to significantly influence all matters submitted to our stockholders for approval28% rewritten
- 10In order to compete, we must attract, retain and motivate key associates, and the failure to do so could have an adverse effect on our business, financial condition and results of operationsNew
- 11We have a very limited workforce and are highly dependent on a small number of individuals to execute our business strategy, which exposes us to significant operational riskNew
- 12The quantum computing industry is competitive and we may not be successful in competing in this industry or establishing and maintaining confidence in our long-term business prospects among current and future partners and customersNew
- 13Even if we are successful in developing qc-LPU100 and LPU prototypes, competitors in the industry may achieve technological breakthroughs that render our systems obsolete or inferior to other technologyNew
- 14The quantum-class laser computing industry is in its early stages and volatile, and if it does not develop, if it develops slower than we anticipate, if it encounters negative publicity or if quantum computing products and services generally do not achieve commercial adoption, the growth of our business will be harmedNew
- 15The cryptocurrency and blockchain markets are highly volatile, and a sustained downturn in cryptocurrency prices or demand could materially reduce the market for our laser-based computing productsNew
- 16Unfavorable conditions in our industries or the global economy could limit our ability to grow our business and negatively affect our results of operationsNew
- 17Our business and operations would suffer in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security or those of third-party providers
Risks Related to Our Legacy Pharmaceutical Business
- 18Our legacy pharmaceutical product candidates, Isomyosamine and Supera-CBD, are subject to extensive clinical development, regulatory approval, and commercialization risks that could reduce the value of these assetsNew
- 19Any legacy pharmaceutical product candidate that obtains marketing approval would be subject to extensive post-marketing regulatory requirements, and could be subject to restrictions or withdrawal from the marketNew
- 20The commercial viability of our legacy pharmaceutical product candidates is dependent on market acceptance, pricing, reimbursement, and competition, any of which could reduce the value of these assetsNew
- 21The Company’s legacy pharmaceutical operations are subject to healthcare laws and regulations, including anti-kickback, fraud and abuse, and healthcare reform legislation, which could affect the value of these pharmaceutical assetsNew
- 22Our legacy pharmaceutical operations involve the use of hazardous materials, and we are subject to environmental, health, and safety laws and regulationsNew
Risks Related to Government Regulation
- 23Our focus on blockchain and cryptocurrency infrastructure exposes us to regulatory, cybersecurity, and market risks that could materially impact adoption of our technologyNew
- 24We may be subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable lawsNew
- 25We expect to incur significant costs in complying with these regulations. Regulations related to quantum computing and LPU technology are currently evolving and we face risks associated with changes to these regulationsNew
Risks Related to Our Intellectual Property
- 26We may not be able to adequately protect or enforce our intellectual property rights, which could harm our competitive position22% rewritten
- 27Our business depends on our exclusive global licensing agreement with LightSolver, and loss of access to this technology or disputes regarding intellectual property could materially and adversely affect our operationsNew
- 28Third-party claims of intellectual property infringement may prevent, delay or otherwise interfere with our business operations76% rewritten
Risks Related to Our Preferred Stock
- 29Our ability to make payments due to the holders of our Series H Preferred Stock and Series G Preferred Stock using cash is also limited by the amount of cash we have on hand at the time such payments are due as well as certain provisions of the DGCLNew
- 30The Series H Certificate of Designations and Series G Certificate of Designations contains restrictive covenants and terms that may make it difficult to procure additional financing and that may affect our financial condition and results of operationsNew
- 31Under the Series H Purchase Agreement and Series G Purchase Agreement, we are subject to certain restrictive covenants that may make it difficult to procure additional financing77% rewritten
- 32Offers or availability for sale of a substantial number of shares of our Common Stock may cause the price of our Common Stock to decline63% rewritten
- 33An active trading market for our Common Stock may not be sustained
- 34We are subject to various internal control reporting requirements under the Sarbanes-Oxley Act. We can provide no assurance that we will at all times in the future be able to report that our internal controls over financial reporting are effective
- 35We incur increased costs and demands on management as a result of compliance with laws and regulations applicable to public companies, which could harm our operating results
- 36If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted28% rewritten
- 37We may issue additional equity securities in the future, which may result in dilution to existing investors
- 38We do not anticipate paying cash dividends on our Common Stock and, accordingly, stockholders must rely on stock appreciation for any return on their investment
- 39If securities analysts do not publish research or reports about our business, or if they publish negative evaluations, the price of our Common Stock could decline21% rewritten
- 40Anti-takeover provisions of our certificate of incorporation, our bylaws and Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove the current members of our board and management
- 41We may be subject to securities litigation in the future33% rewritten
- 42Current market and economic conditions in one or more of our markets could impact our ability to grow our businessNew
Other Q/C Technologies 10-Ks
- FY2024 10-K risk factors51 risks
Independent auditor expressed substantial doubt about our ability to continue as a going concern due to recurring operating losses and insufficient liquidity.
Filed Apr 11, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.