Turn Therapeutics (TTRX) risk factors, FY2025 10-K

Risks Related to Our Business and Industry

1. 01We have a limited operating history and there are inherent uncertainties and risks in pharmaceutical and medical device product development and commercialization
2. 02If we fail to obtain or generate the capital necessary to fund our operations, we will be unable to continue or complete our product development, and you will likely lose your entire investment
3. 03Even if we can raise additional funding, we have in the past and may in the future enter into financing agreements that lead to increased dilution, and which will result in sales of our common stock in the open market, which could adversely impact the trading price of our common stock
4. 04We also may issue our share capital or securities convertible into our share capital from time to time in connection with a financing, acquisition, investments, or otherwise. Any such issuance could result in substantial dilution to our existing shareholders and cause the public price of our common stock to decline
5. 05We are an early-stage company that competes against large, well-established companies with long-standing relationships, extensive clinical data, and recognized brands, as well as against new companies with innovative products
6. 06We depend on certain key personnel and must attract and retain additional talent
7. 07We expect to increase the size of our organization in the future, and we may experience difficulties in managing this growth. If we are unable to manage the anticipated growth of our business, our future revenue and operating results may be harmed
8. 08Our future success will depend on our ability to efficiently manage this growth while continuing to execute on clinical, commercial, and regulatory goals. Our management may also have to divert a disproportionate amount of attention away from day-to-day activities to manage these growth activities
9. 09The success of our business will depend upon our ability to create and expand our brand awareness
10. 10Changes in methods of product manufacturing may result in additional costs or delay
11. 11Our research and development efforts benefit from strategic partnerships and research collaborations, and we cannot guarantee that any previous or future strategic partnerships or research collaborations will be successful
12. 12Our business is dependent on the successful development, regulatory approval, and commercialization of our products, product candidates, and/or future products and product candidates
13. 13Clinical trials and preclinical studies are expensive, time consuming, difficult to design and implement, and involve uncertain outcomes
14. 14The future results of our current or future clinical trials may not support our product candidate and medical device claims or may result in the discovery of unexpected adverse side effects
15. 15Our employees, independent contractors, service providers and other vendors or potential collaborators may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could harm our results of operations
16. 16If we are unable to establish relationships with licensees or collaborators to carry out sales, marketing, and distribution functions or to create effective marketing, sales, and distribution capabilities, we may be unable to market our products successfully
17. 17Natural disasters and other events beyond our control could materially adversely affect us
18. 18Changes in tax laws or in their implementation or interpretation could adversely affect our business and financial condition

Risks Related to Laws and Regulations

1. 19Failure to comply with government regulations could adversely affect our business
2. 20If we fail to comply with healthcare regulations, we could face substantial enforcement actions, including civil and criminal penalties and our business, operations and financial condition could be adversely affected
3. 21Many states have similar laws and regulations, such as anti-kickback and false claims laws, that may be broader in scope
4. 22We may be subject to legal claims against us or claims by us which could have a significant impact on our resulting financial performance
5. 23Obtaining approval of a new device or drug is lengthy, expensive, and inherently uncertain
6. 24The terms of approvals or clearances and ongoing regulations for our products may limit how we market our products, which could materially impair our ability to generate revenue
7. 25Product liability suits could be brought against us due to a defective design, material or workmanship or misuse of our products and could result in expensive and time-consuming litigation and payment of substantial damages
8. 26If our products are subject to product recalls, it could harm our reputation and have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline

Risks Related to Our Intellectual Property, Data Privacy and Cybersecurity

1. 27We may become subject to claims or legal proceedings alleging that we are infringing, misappropriating or otherwise violating the intellectual property rights of others
2. 28Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on us
3. 29Obtaining 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 as a result of noncompliance with these requirements
4. 30We may not be able to obtain and protect our intellectual property rights throughout the world
5. 31Issued patents covering our current or future products or product candidates could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad
6. 32If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
7. 33Intellectual property litigation and proceedings could cause us to spend substantial resources and distract our personnel from their normal responsibilities
8. 34We may be subject to claims asserting that our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property
9. 35Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products and product candidates
10. 36We may need to obtain patent term extension and equivalent extensions outside the United States for our products and product candidates
11. 37If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest
12. 38Laws, rules and regulations that protect the privacy and security of personal information may increase our costs, limit our ability to collect and use that information and subject us to liability if we are unable to fully comply with such laws, rules and regulations
13. 39We rely on trade secrets, technical know-how and other confidential and proprietary information relating to our product development to provide us with competitive advantages. We also collect, maintain and otherwise process certain sensitive and other personal information

Risks Related to Our Indebtedness

1. 40We are subject to various affirmative and negative covenants with respect to our debt financing with Avenue. The covenants may impede our ability to execute our business plan and, if breached, may adversely affect our business, results of operations and financial condition
2. 41Our stockholders may experience dilution as a result of the Loan with Avenue

Risks Related to Ownership of Our Common Stock

1. 42An active trading market may not develop or continue to be liquid and the market price of shares of our common stock may be volatile
2. 43Sales of substantial amounts of our common stock in the public markets by our founder, affiliates, or non-affiliates, or the perception that such sales might occur, could reduce the price that our common stock might otherwise attain
3. 44We are an “emerging growth company” and a “smaller reporting company” and the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors
4. 45Because of his significant ownership of our common stock, our founder has substantial control over our business, and his interests may differ from our interests or those of our other shareholders
5. 46Our amended and restated certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities which may adversely affect our performance
6. 47If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline
7. 48The requirements of being a public company may strain our resources, divert management’s attention, and affect our ability to attract and retain qualified board of director members
8. 49If we fail to maintain proper and effective internal controls over financial reporting, our ability to produce accurate and timely financial statements could be impaired
9. 50Our amended and restated bylaws require exclusive forum in certain courts in the State of Delaware or the federal district courts of the United States for certain types of lawsuits that may have the effect of discouraging lawsuits against our directors and officers
10. 51We may not be able to maintain a listing of our common stock on Nasdaq
11. 52We cannot predict the number of shares we may sell to GEM under the GEM Purchase Agreement, the prices at which such shares may be sold, or the actual proceeds we will receive, and any sales could cause substantial dilution to our stockholders