[POS AM] Autonomix Medical, Inc. SEC Filing
On July 1, 2025, Covenant Logistics Group, Inc. (CVLG) Executive Vice President & Chief Operating Officer Dustin Koehl reported insider activity on SEC Form 4.
- RSU conversion (Code M): 2,820 restricted stock units were converted into an equal number of Class A common shares.
- Tax withholding (Code F): 687 of those shares were immediately surrendered at $25.23 per share to satisfy statutory tax obligations.
- Net ownership change: Koehl’s direct holdings rose by 2,133 shares, bringing his direct stake to that amount after the transactions.
- Remaining equity incentives: 5,640 RSUs remain outstanding under the Third Amended & Restated 2006 Omnibus Incentive Plan, vesting in three equal annual installments starting July 1, 2025.
- Capital structure note: All figures reflect the two-for-one stock split effected as a stock dividend on December 31, 2024.
The filing indicates continued equity alignment by a key executive through scheduled incentive-plan vesting rather than discretionary open-market purchases.
Il 1° luglio 2025, Dustin Koehl, Vicepresidente Esecutivo e Chief Operating Officer di Covenant Logistics Group, Inc. (CVLG), ha comunicato un'attività interna tramite il modulo SEC Form 4.
- Conversione RSU (Codice M): 2.820 unità di azioni vincolate sono state convertite in un ugual numero di azioni ordinarie di Classe A.
- Ritenuta fiscale (Codice F): 687 di queste azioni sono state immediatamente cedute a 25,23 $ per azione per adempiere agli obblighi fiscali previsti per legge.
- Variazione netta nella proprietà: Le partecipazioni dirette di Koehl sono aumentate di 2.133 azioni, portando la sua quota diretta a tale ammontare dopo le transazioni.
- Incentivi azionari residui: Rimangono in essere 5.640 RSU ai sensi del Terzo Piano Incentivi Omnibus Modificato e Ristabilito del 2006, con maturazione in tre rate annuali uguali a partire dal 1° luglio 2025.
- Nota sulla struttura del capitale: Tutti i dati riflettono lo split azionario due per uno effettuato come dividendo azionario il 31 dicembre 2024.
La comunicazione evidenzia un continuo allineamento azionario da parte di un dirigente chiave attraverso la maturazione programmata degli incentivi e non tramite acquisti discrezionali sul mercato aperto.
El 1 de julio de 2025, Dustin Koehl, Vicepresidente Ejecutivo y Director de Operaciones de Covenant Logistics Group, Inc. (CVLG), reportó actividad de insider mediante el formulario SEC Form 4.
- Conversión de RSU (Código M): 2,820 unidades de acciones restringidas se convirtieron en un número igual de acciones ordinarias Clase A.
- Retención fiscal (Código F): 687 de esas acciones fueron entregadas inmediatamente a $25.23 por acción para cumplir con las obligaciones fiscales legales.
- Cambio neto en la propiedad: Las participaciones directas de Koehl aumentaron en 2,133 acciones, alcanzando esa cantidad tras las transacciones.
- Incentivos accionarios restantes: Quedan pendientes 5,640 RSU bajo el Plan de Incentivos Omnibus Modificado y Restablecido de 2006, que se consolidan en tres cuotas anuales iguales a partir del 1 de julio de 2025.
- Nota sobre la estructura de capital: Todas las cifras reflejan el split de acciones dos por uno realizado como dividendo en acciones el 31 de diciembre de 2024.
El reporte indica un alineamiento continuo de capital por parte de un ejecutivo clave mediante la consolidación programada de incentivos en lugar de compras discrecionales en el mercado abierto.
2025년 7월 1일, Covenant Logistics Group, Inc.(CVLG)의 최고운영책임자(COO) 겸 부사장인 Dustin Koehl이 SEC Form 4를 통해 내부자 거래를 신고했습니다.
- RSU 전환 (코드 M): 2,820개의 제한 주식 단위가 동일 수량의 클래스 A 보통주로 전환되었습니다.
- 세금 원천징수 (코드 F): 이 중 687주는 주당 $25.23에 즉시 매도되어 법정 세금 의무를 충족했습니다.
- 순 소유권 변동: Koehl의 직접 보유 주식이 2,133주 증가하여 이번 거래 후 직접 보유 지분이 해당 수치가 되었습니다.
- 잔여 주식 인센티브: 2006년 개정 및 재확정된 제3차 종합 인센티브 계획에 따라 5,640 RSU가 남아 있으며, 2025년 7월 1일부터 3년에 걸쳐 균등 분할로 베스팅됩니다.
- 자본 구조 참고: 모든 수치는 2024년 12월 31일 주식 배당으로 시행된 2대1 주식 분할을 반영한 것입니다.
이번 신고는 핵심 임원의 주식 인센티브 계획에 따른 예정된 베스팅을 통해 지속적인 주식 보유 연계를 나타내며, 임의의 공개 시장 매수는 없었음을 보여줍니다.
Le 1er juillet 2025, Dustin Koehl, Vice-Président Exécutif et Directeur des Opérations de Covenant Logistics Group, Inc. (CVLG), a déclaré une activité d’initié via le formulaire SEC Form 4.
- Conversion de RSU (Code M) : 2 820 unités d’actions restreintes ont été converties en un nombre égal d’actions ordinaires de Classe A.
- Retenue fiscale (Code F) : 687 de ces actions ont été immédiatement cédées à 25,23 $ par action pour satisfaire aux obligations fiscales légales.
- Changement net de propriété : La détention directe de Koehl a augmenté de 2 133 actions, portant sa participation directe à ce montant après les transactions.
- Incentives en actions restants : 5 640 RSU restent en circulation dans le cadre du Troisième Plan Omnibus Modifié et Restreint de 2006, acquérant droit en trois versements annuels égaux à partir du 1er juillet 2025.
- Note sur la structure du capital : Tous les chiffres tiennent compte du split d’actions deux pour un effectué en dividende en actions le 31 décembre 2024.
Le dépôt indique un alignement continu des intérêts en actions par un cadre clé via l’acquisition programmée des incitations plutôt que par des achats discrétionnaires sur le marché libre.
Am 1. Juli 2025 meldete Dustin Koehl, Executive Vice President und Chief Operating Officer von Covenant Logistics Group, Inc. (CVLG), Insider-Aktivitäten mittels SEC Formular 4.
- RSU-Umwandlung (Code M): 2.820 Restricted Stock Units wurden in dieselbe Anzahl von Stammaktien der Klasse A umgewandelt.
- Steuerliche Einbehaltung (Code F): 687 dieser Aktien wurden sofort zu je 25,23 $ abgegeben, um gesetzliche Steuerverpflichtungen zu erfüllen.
- Nettoänderung des Eigentums: Koehls direkte Beteiligung stieg um 2.133 Aktien und beträgt nach den Transaktionen diesen Wert.
- Verbleibende Aktienanreize: Unter dem Drittüberarbeiteten und Neufestgelegten Omnibus-Anreizplan von 2006 sind noch 5.640 RSUs ausstehend, die in drei gleichen jährlichen Tranchen ab dem 1. Juli 2025 vesten.
- Hinweis zur Kapitalstruktur: Alle Zahlen berücksichtigen den Aktien-Split zwei-zu-eins, der am 31. Dezember 2024 als Aktiendividende durchgeführt wurde.
Die Meldung zeigt eine fortgesetzte Aktienausrichtung eines wichtigen Führungskräfte durch planmäßiges Vesting der Anreizpläne und nicht durch diskretionäre Käufe am offenen Markt.
- Executive ownership increase: Dustin Koehl’s direct holdings rose by 2,133 shares, signalling continued equity alignment.
- Substantial unvested RSUs: 5,640 remaining RSUs provide multi-year incentive alignment with shareholder value.
- No open-market buying: Shares were acquired through automatic RSU vesting rather than discretionary purchases, limiting strength of the bullish signal.
- Tax-driven share disposal: 687 shares were surrendered to cover withholding taxes, partially offsetting the gross acquisition.
Insights
TL;DR: Scheduled RSU vesting adds 2,133 net shares to EVP/COO’s stake; routine, modestly positive signal, limited market impact.
The transaction stems from the standard vesting of equity awards rather than opportunistic buying or selling. While the net increase in direct ownership (+2,133 shares) modestly aligns management interests with shareholders, the simultaneous tax-withholding disposition shows no incremental cash outlay by the executive. The remaining 5,640 RSUs provide future incentive alignment through 2027. Given the small absolute share count relative to CVLG’s 13 million-plus share float, the event is not materially impactful to valuation or liquidity but is a routine, mildly positive governance datapoint.
Il 1° luglio 2025, Dustin Koehl, Vicepresidente Esecutivo e Chief Operating Officer di Covenant Logistics Group, Inc. (CVLG), ha comunicato un'attività interna tramite il modulo SEC Form 4.
- Conversione RSU (Codice M): 2.820 unità di azioni vincolate sono state convertite in un ugual numero di azioni ordinarie di Classe A.
- Ritenuta fiscale (Codice F): 687 di queste azioni sono state immediatamente cedute a 25,23 $ per azione per adempiere agli obblighi fiscali previsti per legge.
- Variazione netta nella proprietà: Le partecipazioni dirette di Koehl sono aumentate di 2.133 azioni, portando la sua quota diretta a tale ammontare dopo le transazioni.
- Incentivi azionari residui: Rimangono in essere 5.640 RSU ai sensi del Terzo Piano Incentivi Omnibus Modificato e Ristabilito del 2006, con maturazione in tre rate annuali uguali a partire dal 1° luglio 2025.
- Nota sulla struttura del capitale: Tutti i dati riflettono lo split azionario due per uno effettuato come dividendo azionario il 31 dicembre 2024.
La comunicazione evidenzia un continuo allineamento azionario da parte di un dirigente chiave attraverso la maturazione programmata degli incentivi e non tramite acquisti discrezionali sul mercato aperto.
El 1 de julio de 2025, Dustin Koehl, Vicepresidente Ejecutivo y Director de Operaciones de Covenant Logistics Group, Inc. (CVLG), reportó actividad de insider mediante el formulario SEC Form 4.
- Conversión de RSU (Código M): 2,820 unidades de acciones restringidas se convirtieron en un número igual de acciones ordinarias Clase A.
- Retención fiscal (Código F): 687 de esas acciones fueron entregadas inmediatamente a $25.23 por acción para cumplir con las obligaciones fiscales legales.
- Cambio neto en la propiedad: Las participaciones directas de Koehl aumentaron en 2,133 acciones, alcanzando esa cantidad tras las transacciones.
- Incentivos accionarios restantes: Quedan pendientes 5,640 RSU bajo el Plan de Incentivos Omnibus Modificado y Restablecido de 2006, que se consolidan en tres cuotas anuales iguales a partir del 1 de julio de 2025.
- Nota sobre la estructura de capital: Todas las cifras reflejan el split de acciones dos por uno realizado como dividendo en acciones el 31 de diciembre de 2024.
El reporte indica un alineamiento continuo de capital por parte de un ejecutivo clave mediante la consolidación programada de incentivos en lugar de compras discrecionales en el mercado abierto.
2025년 7월 1일, Covenant Logistics Group, Inc.(CVLG)의 최고운영책임자(COO) 겸 부사장인 Dustin Koehl이 SEC Form 4를 통해 내부자 거래를 신고했습니다.
- RSU 전환 (코드 M): 2,820개의 제한 주식 단위가 동일 수량의 클래스 A 보통주로 전환되었습니다.
- 세금 원천징수 (코드 F): 이 중 687주는 주당 $25.23에 즉시 매도되어 법정 세금 의무를 충족했습니다.
- 순 소유권 변동: Koehl의 직접 보유 주식이 2,133주 증가하여 이번 거래 후 직접 보유 지분이 해당 수치가 되었습니다.
- 잔여 주식 인센티브: 2006년 개정 및 재확정된 제3차 종합 인센티브 계획에 따라 5,640 RSU가 남아 있으며, 2025년 7월 1일부터 3년에 걸쳐 균등 분할로 베스팅됩니다.
- 자본 구조 참고: 모든 수치는 2024년 12월 31일 주식 배당으로 시행된 2대1 주식 분할을 반영한 것입니다.
이번 신고는 핵심 임원의 주식 인센티브 계획에 따른 예정된 베스팅을 통해 지속적인 주식 보유 연계를 나타내며, 임의의 공개 시장 매수는 없었음을 보여줍니다.
Le 1er juillet 2025, Dustin Koehl, Vice-Président Exécutif et Directeur des Opérations de Covenant Logistics Group, Inc. (CVLG), a déclaré une activité d’initié via le formulaire SEC Form 4.
- Conversion de RSU (Code M) : 2 820 unités d’actions restreintes ont été converties en un nombre égal d’actions ordinaires de Classe A.
- Retenue fiscale (Code F) : 687 de ces actions ont été immédiatement cédées à 25,23 $ par action pour satisfaire aux obligations fiscales légales.
- Changement net de propriété : La détention directe de Koehl a augmenté de 2 133 actions, portant sa participation directe à ce montant après les transactions.
- Incentives en actions restants : 5 640 RSU restent en circulation dans le cadre du Troisième Plan Omnibus Modifié et Restreint de 2006, acquérant droit en trois versements annuels égaux à partir du 1er juillet 2025.
- Note sur la structure du capital : Tous les chiffres tiennent compte du split d’actions deux pour un effectué en dividende en actions le 31 décembre 2024.
Le dépôt indique un alignement continu des intérêts en actions par un cadre clé via l’acquisition programmée des incitations plutôt que par des achats discrétionnaires sur le marché libre.
Am 1. Juli 2025 meldete Dustin Koehl, Executive Vice President und Chief Operating Officer von Covenant Logistics Group, Inc. (CVLG), Insider-Aktivitäten mittels SEC Formular 4.
- RSU-Umwandlung (Code M): 2.820 Restricted Stock Units wurden in dieselbe Anzahl von Stammaktien der Klasse A umgewandelt.
- Steuerliche Einbehaltung (Code F): 687 dieser Aktien wurden sofort zu je 25,23 $ abgegeben, um gesetzliche Steuerverpflichtungen zu erfüllen.
- Nettoänderung des Eigentums: Koehls direkte Beteiligung stieg um 2.133 Aktien und beträgt nach den Transaktionen diesen Wert.
- Verbleibende Aktienanreize: Unter dem Drittüberarbeiteten und Neufestgelegten Omnibus-Anreizplan von 2006 sind noch 5.640 RSUs ausstehend, die in drei gleichen jährlichen Tranchen ab dem 1. Juli 2025 vesten.
- Hinweis zur Kapitalstruktur: Alle Zahlen berücksichtigen den Aktien-Split zwei-zu-eins, der am 31. Dezember 2024 als Aktiendividende durchgeführt wurde.
Die Meldung zeigt eine fortgesetzte Aktienausrichtung eines wichtigen Führungskräfte durch planmäßiges Vesting der Anreizpläne und nicht durch diskretionäre Käufe am offenen Markt.
As filed with the Securities and Exchange Commission on July 3, 2025.
Registration No. 333-282940
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
FORM
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AUTONOMIX MEDICAL, INC.
(Exact Name of Registrant as Specified in Its Charter)
| | 3841 | |
| (State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
(
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Brad Hauser
Chief Executive Officer
21 Waterway Avenue, Suite 300
The Woodlands, Texas 77380
(713) 588-6150
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)
Copies to:
Cavas S. Pavri
Johnathan Duncan
ArentFox Schiff LLP
1717 K Street NW
Washington, DC 20006
Telephone: (202) 724-6847
Fax: (202) 778-6460
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer | | Accelerated filer | |
| | | Smaller reporting company | |
| Emerging growth company | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
This Post-Effective Amendment No. 1 (this “Post-Effective Amendment”) to the Registration Statement on Form S-1 (File No. 333-282940) (the “Initial Registration Statement”), which was declared effective by the Securities and Exchange Commission on November 22, 2024 (the “Registration Statement”), is being filed to include an updated prospectus relating to the offer and sale of 1,533,096 shares of common stock issuable upon the exercise of warrants that were issued in connection with the Company’s public offering completed pursuant to the Initial Registration Statement, and update and supplement, among other things, the information contained in the Registration Statement to include the information contained in the registrant’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025 that was filed with the SEC on May 29, 2025.
The information included in this filing amends the Initial Registration Statement and the prospectus contained therein. No additional securities are being registered under this Post-Effective Amendment. All applicable registration fees were paid at the time of the filing of the Initial Registration Statement.
The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.
| Preliminary Prospectus |
Subject to Completion |
Dated July 3, 2025 |
1,533,096 Shares of Common Stock Issuable Upon Exercise of Warrants
This prospectus relates to 1,533,096 shares of common stock issuable upon the exercise of Series A warrants (the “Series A Warrant” or the “Common Warrants”) issued in the public offering we completed November 22, 2024.
Our common stock is listed on Nasdaq under the symbol “AMIX.” On June 30, 2025, the last reported sale price of our common stock on Nasdaq was $1.57 per share. There is no established public trading market for the Series A Warrants, and we do not expect a market to develop.
We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”) and we have elected to comply with certain reduced public company reporting requirements.
Investing in our securities involves a high degree of risk. See the section entitled “Risk Factors” beginning on page 5 of this prospectus for a discussion of risks that should be considered in connection with an investment in our securities.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is _____________________, 2025
TABLE OF CONTENTS
| Page | |
| ABOUT THIS PROSPECTUS |
i |
| PROSPECTUS SUMMARY |
1 |
| RISK FACTORS |
5 |
| CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS |
22 |
| USE OF PROCEEDS |
23 |
| DIVIDEND POLICY |
23 |
| DILUTION |
23 |
| MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
24 |
| BUSINESS |
30 |
| MANAGEMENT |
47 |
| EXECUTIVE AND DIRECTOR COMPENSATION |
49 |
| CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS AND DIRECTOR INDEPENDENCE |
55 |
| SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
56 |
| DESCRIPTION OF CAPITAL STOCK |
57 |
| DESCRIPTION OF COMMON WARRANTS |
60 |
| PLAN OF DISTRIBUTION |
62 |
| LEGAL MATTERS |
62 |
| EXPERTS |
62 |
| WHERE YOU CAN FIND MORE INFORMATION |
62 |
| INDEX TO FINANCIAL STATEMENTS |
63 |
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-1 that we filed with the United States Securities and Exchange Commission (“SEC”) to register the securities offered hereby under the Securities Act. We may also file a prospectus supplement or post-effective amendment to the registration statement of which this prospectus forms a part that may contain material information relating to these offerings. You should carefully read this prospectus before deciding to invest in our securities.
We have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the securities offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus or in any applicable free writing prospectus is current only as of its date, regardless of its time of delivery or any sale of our securities. Our business, financial condition, results of operations and prospects may have changed since that date.
For investors outside the United States: We have not done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities and the distribution of this prospectus outside the United States.
This prospectus may contain references to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus, including logos, artwork, and other visual displays, may appear without the ® or TM symbols. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other company.
No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.
This prospectus contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. We obtained the industry and market data in this prospectus from our own research as well as from industry and general publications, surveys and studies conducted by third parties. This data involves a number of assumptions and limitations and contains projections and estimates of the future performance of the industries in which we operate that are subject to a high degree of uncertainty. We caution you not to give undue weight to such projections, assumptions and estimates.
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before deciding to invest in our securities. You should read this entire prospectus carefully, including the “Risk Factors” section in this prospectus. References in this prospectus to “we”, “us”, “its”, “our” or the “Company” are to Autonomix Medical, Inc., as appropriate to the context.
Overview
We are a development-stage medical device company focused on advancing innovative technologies for sensing and treating disorders relating to the nervous system. Our first-in-class technology platform includes a catheter-based microchip-enabled sensing array that can detect and differentiate neural signals with a high degree of sensitivity as demonstrated in animal studies. We are initially developing our technology for patients with pancreatic cancer, a condition that can cause debilitating pain and needs a more effective solution. However, we believe our technology constitutes a platform with the potential to address dozens of indications in a range of areas including chronic pain management from all causes, hypertension, cardiovascular disease and a wide range of other nerve-related disorders.
As we calculate sensitivity as a function of the minimum signal detection voltage, measured in microvolts (µV), multiplied by the area of the electrode (in square millimeters). This combined measure reflects the system’s signal resolving power and spatial resolution. For comparison, the Boston Scientific Orion device has a signal detection threshold of approximately 10 µV with electrode dimensions of roughly 0.4 mm by 0.5 mm. In contrast, the Autonomix system is designed to have signal detection thresholds below 5 µV, with prototype electrode dimensions as small as approximately 0.02 mm by 0.03 mm. These metrics indicate a substantially higher sensitivity relative to currently marketed devices.
We believe that, if validated in clinical trials, this enhanced sensitivity may enable a novel method of transvascular nerve targeting, treatment, and confirmation across a broad range of neurological conditions. A key enabler of this approach is the ability to process neural signals with our proprietary microchip in immediate proximity to the antenna, minimizing signal degradation and preserving fidelity at the point of detection. This local processing capability is critical to achieving real-time, high-resolution signal capture within the vascular system. Such a capability does not exist in currently available systems and may address significant unmet medical needs. While we have the technical capability to manufacture electrodes at these small dimensions, ongoing development work suggests that reliable nerve signal detection may be achievable with larger electrode sizes. This could reduce manufacturing complexity, lower development risk, and accelerate timelines without compromising performance.
Our development efforts can be divided into two parts: diagnostic sensing and therapeutic radiofrequency ablation, where diagnostic is focused on sensing and identifying disorder-related neuronal activity with enough precision to enable targeted therapy with ablation. Our sensing technology has already successfully demonstrated, in animal models, the ability to successfully identify a signal from a specific nerve bundle before ablation and confirmation of termination of that signal from the treated nerves after ablation. We are now in the process of improving the design of this catheter to meet the standards required for human use. In parallel with this effort, we completed our initial trial phase of our first-in-human proof-of-concept trial ("PoC 1") evaluating the safety and effectiveness of delivering transvascular energy to ablate relevant problematic nerves and mitigate pain in patients with pancreatic cancer pain, with the intent to bring sensing and treatment together in a future pivotal clinical trial to enable the commercial launch of our technology. As a result of the positive results from PoC 1, we have expanded the protocol into a follow-on phase ("PoC 2"), now including pain management for additional visceral cancers, like pancreatic, gall bladder, liver, and bile duct, with potential further expansion in oncology, gastroenterology, and other sectors, as well as earlier stage pancreatic cancer patients experiencing moderate to severe pain.
We are a development-stage company and there is no guarantee that the results of any trials will produce positive results or that the results will support our claims.
We believe one of the most demanding aspects of our commercialization plan will be scaling up from our existing sensing prototype to a robust commercial version. Today, our sensing device is hand built and includes a combination of hand-crafted and 3D printed parts. We have not yet assembled or tested what will be the commercial version of our proposed device. Even if our proposed device is cleared for commercial use, there is no assurance that we will be able to successfully build such device on a commercial scale.
Recent Developments
Fractional Shares Potentially Issuable in Connection with Reverse Stock Split
On October 24, 2024, we completed a one-for-twenty reverse stock split of our common stock. In connection with the approval of the reverse stock split, we agreed that no fractional shares will be issued in connection with the reverse stock split and that we would issue one full share of the post-reverse stock split common stock to any stockholder who would have been entitled to receive a fractional share as a result of the process. On November 1, 2024, we received notice from the Depository Trust & Clearing Corporation (“DTCC”) on behalf of the brokerage firms that hold the shares of our common stock held in “street name” that in connection with the foregoing rounding of shares we would need to issue 271,846 shares of common stock. Prior to our required announcement regarding the reverse stock split on October 22, 2024, we estimate there were approximately 4,800 shareholders of record. We do not believe the number of shares being requested is correct based on the historical number of shareholders of our common stock and are aware of similar occurrences in recent months for other companies completing a reverse stock split. As such, we have begun an inquiry into the calculations set forth in the request. During the pendency of this inquiry, we do not intend to issue any shares in connection with the fractional shares being requested. We may face potential liability for our failure to issue the shares of common stock if it is determined that it is required to issue such shares.
Company Information
Our principal executive offices are located at 21 Waterway Avenue, Suite 300, The Woodlands, Texas 77380 and our telephone number is (713) 588-6150. Our website address is www.autonomix.com. The information on or accessible through our website is not part of this prospectus.
Risk Factors Summary
Our business is subject to a number of risks of which you should be aware before making an investment decision. You should carefully consider all of the information set forth in this prospectus and, in particular, should evaluate the specific factors set forth in the section titled “Risk Factors” before deciding whether to invest in our common stock. Among these important risks are the following:
Risks Related to Our Overall Business
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Risks Related to Government Regulation and Product Approvals
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Risks Related to Intellectual Property
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Risks Related to Information Technology
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Risks Related to our Common Stock
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The Offering
| Securities offered by us: |
1,533,096 shares of common stock issuable upon the exercise of the Series A Warrants. |
| Common stock outstanding immediately before this offering |
4,294,471 shares, which consists of 4,022,625 shares outstanding; plus 271,846 shares potentially issuable after the date of this prospectus in connection with the rounding of fractional shares in connection with the reverse stock split completed October 24, 2024 to the holders of our shares held in "street name" (See “Prospectus Summary – Recent Developments – Fractional Shares Potentially Issuable in Connection with Reverse Stock Split” for more information). |
| Common stock outstanding immediately after this offering |
5,827,567 shares of common stock, assuming full exercise of the Series A Warrants. |
| Use of proceeds |
The Series A Warrants are each exercisable immediately, will remain exercisable at any time up to November 22, 2029 and have an exercise price of $6.54 per share. Assuming the exercise of all warrants for cash at the current exercise price, we will receive proceeds of approximately $10.0 million. We plan to use any proceeds to fund our clinical trial, for other research and development, for development of intellectual property, and for working capital. |
| Risk Factors |
An investment in our securities involves a high degree of risk. See “Risk Factors” beginning on page 5 of this prospectus for a discussion of the risk factors you should carefully consider before deciding to invest in our securities. |
| Nasdaq listing symbol |
Our common stock is listed on The Nasdaq Capital Market under the symbol “AMIX.” |
The number of shares of common stock to be outstanding after this Offering is based on 4,294,471 shares, which consists of 4,022,625 shares outstanding as of June 30, 2025 and 271,846 shares potentially issuable after the date of this Offering in connection with the rounding of fractional shares in connection with the reverse stock split completed October 24, 2024 to the holders of our shares held in "street name", plus 1,533,096 issuable upon exercise of Series A Warrants and excludes:
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Except as otherwise indicated, the information in this prospectus assumes no exercise of options or warrants.
RISK FACTORS
Investing in our securities involves a high degree of risk. Before investing in our securities, you should consider carefully the risks and uncertainties discussed hereunder “Risk Factors”. You should carefully consider each of the following risks, together with all other information set forth in this prospectus, including the financial statements and the related notes, before making a decision to buy our securities. If any of the following risks actually occurs, our business could be harmed. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.
Risks Related to Our Overall Business
Factors raise substantial doubt about our ability to continue as a going concern.
As of March 31, 2025, we had an accumulated deficit of $50.4 million, negative cash flows from operating activities of $8.3 million and working capital of $7.9 million, which raises substantial doubt about our ability to continue as a going concern. Further, we have incurred, and expect to continue to incur, significant costs in pursuit of our business plans. We cannot assure you that our plans to raise sufficient capital to fund our business will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The financial statements contained elsewhere in this prospectus do not include any adjustments that might result from our inability to raise additional capital or our inability to continue as a going concern.
We have no approved products, and we cannot assure you that we will generate revenue or become profitable in the future.
Our products may never be cleared by the United States Food & Drug Administration (“FDA”) or become commercially viable or accepted for use. We have incurred significant losses since our inception and expect to continue to experience operating losses and negative cash flow for the foreseeable future. We expect to expend significant resources on hiring of personnel, continued scientific and product research and development, product testing and preclinical and clinical investigation, intellectual property development and prosecution, marketing and promotion, capital expenditures, working capital, general and administrative expenses, and fees and expenses associated with our capital raising efforts. We expect to incur costs and expenses related to consulting costs, hiring of scientists, engineers, science and other operational personnel, and the continued development of relationships with strategic partners.
We will need additional financing over the longer term to execute our business plan and fund operations, which additional financing may not be available on reasonable terms or at all.
We believe our existing capital resources, will be sufficient to fund our operations into the first calendar quarter of 2026 without additional capital infusion.
We will require significant capital to complete clinical trials, seek approval of our products, mount a major sales and marketing effort and execute our business plan. We cannot give any assurance that we will be able to obtain all the necessary funding that we may need. We may pursue additional funding through various financing sources, including additional equity offerings, the issuance of debt securities, fees associated with licensing some or all of our technology, joint ventures with capital partners and project type financing. There can be no assurance that funds will be available on commercially reasonable terms, if at all. If financing is not available on satisfactory terms, we may be unable to further pursue our business plan and we may be unable to continue operations, in which case you may lose some or all of your investment. 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 operation plans.
Alternatively, we may consider changes in our business plan that might enable us to achieve aspects of our business objectives and lead to some commercial success with a smaller amount of capital, but we cannot assure that changes in our business plan will result in revenues or maintain any value in your investment.
We intend to utilize a single manufacturer for the manufacture of our lead product candidate and expect to continue to do so for commercial products. Risks associated with the manufacturing of our products could reduce our gross margins and negatively affect our operating results.
We do not have any manufacturing facilities or direct manufacturing personnel. We currently rely, and expect to continue to rely, on a single manufacturer for the manufacture of our lead product candidate for commercial manufacture. As such, we are subject to numerous risks relating to our reliance on a single manufacturer. If they encounter problems in manufacturing our product candidate, then our business could be significantly impacted. These problems include:
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If demand for our future products increases, our manufacturer will need to invest additional resources to purchase components, hire and train employees, and enhance their manufacturing processes. If they fail to increase production capacity efficiently, our sales may not increase in line with our expectations and our operating margins could fluctuate or decline. We do not have a long-term agreement with our manufacturer and there is no assurance that they will continue to provide us with manufacturing services in the future.
We are a developmental stage company and have not yet had a history of generating revenue.
As a development-stage entity, we have not generated any revenues. Investors are subject to all the risks incident to the creation and development of a new business and each investor should be prepared to withstand a complete loss of investment. We have not emerged from the development stage and may be unable to raise further equity. These factors raise substantial doubt about our ability to continue as a going concern.
Our business may be adversely affected by the state of the global economy, uncertainties in global financial markets, and possible trade tariffs and trade restrictions.
Our operations and performance will depend significantly on worldwide economic and geopolitical conditions. Uncertainty about global economic conditions could result in potential customers postponing purchases of our future products in response to tighter credit, unemployment, negative financial news and/or declines in income or asset values and other macroeconomic factors, which could have a material negative effect on demand for our future products and, accordingly, on our business, results of operations or financial condition. For example, current global financial markets continue to reflect uncertainty, which has been heightened by the COVID-19 pandemic and the ongoing military conflict between Russia and Ukraine and the ongoing conflict in Israel. Given these uncertainties, there could be further disruptions to the global economy, financial markets and consumer confidence. If economic conditions deteriorate unexpectedly, our business and results of operations could be materially and adversely affected. For example, our future customers, including our distributors and their customers, may have trouble obtaining the working capital and other financing necessary to support historical or projected purchasing patterns, which could negatively affect our results of operations.
Recent global economic slowdowns could continue and potentially result in certain economies dipping into economic recessions, including in the United States. A weak or declining economy may in the future strain our manufacturers or suppliers, possibly result in supply disruptions. General trade tensions between the United States and the world have recently been escalated by the current U.S. administration, which has recently proposed or enacted significant tariffs and substantial changes to trade policies, which could adversely affect our business. For example, the U.S. administration has imposed significant tariff increases on foreign products, including most recently from Canada, Mexico and China, that in the past have resulted in, and may result in, future retaliatory tariffs on U.S. goods and products or potential currency devaluations. We cannot predict whether these policies will continue, or if new policies will be enacted, or the impact, if any, that any policy changes could have on our business. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the economic climate and financial market conditions could adversely affect our business. Additionally, increased inflation around the world, including in the United States, applies pressure to our costs. Continued economic slowdowns or recessions and inflationary pressures could have a negative impact on our business, including decreased demand, increased costs, and other challenges. Government actions to address economic slowdowns and increased inflation, including increased interest rates, also could result in negative impacts to our growth.
Additionally, Russia’s invasion of Ukraine in early 2022 triggered significant sanctions from U.S. and European countries. Resulting changes in U.S. trade policy could trigger retaliatory actions by Russia, its allies and other affected countries, including China, resulting in a potential trade war. Furthermore, if the conflict between Russia and Ukraine continues for a prolonged period of time, or if other countries, including the U.S., become involved in the conflict, we could face significant adverse effects to our business and financial condition. For example, if our supply or customer arrangements are disrupted due to expanded sanctions or involvement of countries where we have operations or relationships in the future, our business could be materially disrupted. Further, the use of cyberattacks could expand as part of the conflict, which could adversely affect our ability to maintain or enhance our cybersecurity and data protection measures.
The current U.S. administration took several executive actions, including the issuance of a number of executive orders, that imposed significant burdens on, or otherwise materially delayed, the FDA’s ability to engage in routine oversight activities, such as implementing statutes through rulemaking, issuance of guidance, and review and approval of marketing applications. It is difficult to predict whether or how these orders will be rescinded and replaced under the current or future administrations.
The inability to obtain adequate financing from debt or capital sources in the future could force us to self-fund strategic initiatives or even forego certain opportunities, which in turn could potentially harm our performance.
We have limited experience in assembling and testing our products and may encounter problems or delays in the assembly of our products or fail to meet certain regulatory requirements which could result in an adverse effect on our business and financial results.
We have limited experience in assembling and testing our planned device and no experience in doing so on a commercial scale. To become profitable, we must assemble and test our planned device in commercial quantities in compliance with regulatory requirements and at an acceptable cost. Increasing our capacity to assemble and test our products on a commercial scale will require us to improve internal efficiencies. We may encounter a number of difficulties in increasing our assembly and testing capacity, including:
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If we are unable to satisfy commercial demand for our planned device due to our inability to assemble and test our planned device, our ability to generate revenue would be impaired, market acceptance of our products could be adversely affected and customers may instead purchase or use, our competitors’ products.
Rapidly changing technology in life sciences could make the products we are developing obsolete.
The medical device and life-science industry in general is characterized by rapid and significant technological changes, frequent new product introductions and enhancements and evolving industry standards. Our future success will depend on our ability to continually develop and then improve the products that we design and to develop and introduce new products that address the evolving needs of our customers on a timely and cost-effective basis.
Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and our financial condition and results of operations.
Actual events involving limited liquidity, defaults, non-performance, or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. For example, on March 10, 2023, Silicon Valley Bank (“SVB”) (now a division of First Citizens Bank), was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation, or the FDIC, as receiver, which has been followed by the collapse of Signature Bank Corp. (“Signature”), Silvergate Capital Corp. and First Republic Bank. Although we were not a borrower under or party to any material letter of credit or any other such instruments with SVB, Signature or any other financial institution, if we enter into any such instruments and any of our lenders or counterparties to such instruments were to be placed into receivership, we may be unable to access such funds. In addition, if any of our partners, suppliers or other parties with whom we conduct business are unable to access funds pursuant to such instruments or lending arrangements with such a financial institution, such parties’ ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected. In this regard, counterparties to credit agreements and arrangements with these financial institutions, and third parties such as beneficiaries of letters of credit (among others), may experience direct impacts from the closure of these financial institutions and uncertainty remains over liquidity concerns in the broader financial services industry. Similar impacts have occurred in the past, such as during the 2008-2010 financial crisis. Inflation and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates.
Our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, any financial institutions with which we enter into credit agreements or arrangements directly, or the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets or concerns or negative expectations about the prospects for companies in the financial services industry. These factors could involve financial institutions or financial services industry companies with which we have financial or business relationships but could also include factors involving financial markets or the financial services industry generally.
The results of events or concerns that involve one or more of these factors could include a variety of material and adverse impacts on our current and projected business operations and our financial condition and results of operations. These risks include, but may not be limited to, the following:
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In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses or other obligations, financial or otherwise, result in breaches of our financial and/or contractual obligations or result in violations of federal or state wage and hour laws. Any of these impacts, or any other impacts resulting from the factors described above or other related or similar factors, could have material adverse impacts on our liquidity and our current and/or projected business operations and financial condition and results of operations.
In addition, any further deterioration in the macroeconomic economy or financial services industry could lead to losses or defaults by our partners, vendors, or suppliers, which in turn, could have a material adverse effect on our current and/or projected business operations and results of operations and financial condition. For example, a partner may fail to make payments when due, default under their agreements with us, become insolvent or declare bankruptcy, or a supplier may determine that it will no longer deal with us as a customer. In addition, a vendor or supplier could be adversely affected by any of the liquidity or other risks that are described above as factors that could result in material adverse impacts on us, including but not limited to delayed access or loss of access to uninsured deposits or loss of the ability to draw on existing credit facilities involving a troubled or failed financial institution. The bankruptcy or insolvency of any partner, vendor or supplier, or the failure of any partner to make payments when due, or any breach or default by a partner, vendor or supplier, or the loss of any significant supplier relationships, could cause us to suffer material losses and may have a material adverse impact on our business.
We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights.
We may from time to time seek to enforce our intellectual property rights against infringers when we determine that a successful outcome is probable and may lead to an increase in the value of the intellectual property. If we choose to enforce our patent rights against a party, then that individual or company has the right to ask the court to rule that such patents are invalid or should not be enforced. Additionally, the validity of our patents and the patents we have licensed may be challenged if a petition for post grant proceedings such as inter-parties review and post grant review is filed within the statutorily applicable time with the U.S. Patent and Trademark Office (“USPTO”). These lawsuits and proceedings are expensive and would consume time and resources and divert the attention of managerial and scientific personnel even if we were successful in stopping the infringement of such patents. In addition, there is a risk that the court will decide that such patents are not valid and that we do not have the right to stop the other party from using the inventions. There is also the risk that, even if the validity of such patents is upheld, the court will refuse to stop the other party on the ground that such other party's activities do not infringe our intellectual property rights. In addition, in recent years the U.S. Supreme Court modified some tests used by the USPTO in granting patents over the past 20 years, which may decrease the likelihood that we will be able to obtain patents and increase the likelihood of a challenge of any patents we obtain or license.
Catastrophic events and disaster recovery may disrupt business continuity.
A disruption or failure of our systems or operations in the event of a natural disaster or severe weather event, including, but not limited to, earthquakes, wildfires, droughts, flooding, tornadoes, hurricanes or tsunamis, health pandemic, such as an influenza outbreak within our workforce, or man-made catastrophic event could cause delays in completing sales, continuing production or performing other critical functions of our business, particularly if a catastrophic event were to occur at our premises. Global climate change could result in certain natural disasters occurring more frequently or with greater intensity. Any of these events could severely affect our ability to conduct normal business operations and, as a result, our operating results could be adversely affected. There may also be secondary impacts that are unforeseeable as well, such as impacts on our customers, which could cause delays in new orders, delays in completing sales or even order cancellations.
We may fail to meet the Sarbanes-Oxley regulations and may lack the financial controls and safeguards required of public companies.
Ensuring that we have adequate internal financial and accounting controls and procedures in place to produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be re-evaluated frequently. Our management has concluded that our internal controls over financial reporting are ineffective and has identified material weaknesses in our internal controls in areas such as the lack of segregation of duties; general technology controls; and financial statement reporting. While management is working to remediate the material weaknesses, there is no assurance that such changes, when economically feasible and sustainable, will remediate the identified material weaknesses or that the controls will prevent or detect future material weaknesses. If we are not able to maintain effective internal control over financial reporting, our financial statements, including related disclosures, may be inaccurate, which could have a material adverse effect on our business. We may discover additional material weaknesses in our internal financial and accounting controls and procedures that need improvement from time to time.
Management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with United States generally accepted accounting principles. Management does not expect that our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our company will have been detected.
We are required to comply with Section 404 of the Sarbanes-Oxley Act. We expect to expend significant resources in developing the necessary documentation and testing procedures required by Section 404. We cannot be certain that the actions we will be taking to improve our internal controls over financial reporting will be sufficient, or that we will be able to implement our planned processes and procedures in a timely manner. In addition, if we are unable to produce accurate financial statements on a timely basis, investors could lose confidence in the reliability of our financial statements, which could cause the market price of our common stock to decline and make it more difficult for us to finance our operations and growth.
While our Company’s management is working to improve our internal controls and procedures, at present management has determined that our internal controls were deemed to be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
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We are required to include a report of management on the effectiveness of our internal control over financial reporting. We expect to incur additional expenses and diversion of management’s time as a result of performing the system and process evaluation, testing and remediation required in order to comply with the management certification requirements.
Presently, we do not have a sufficient number of employees to segregate responsibilities and may be unable to afford increasing our staff or engaging outside consultants or professionals to overcome our lack of employees. During the course of our testing, we may identify other deficiencies that we may not be able to timely remediate. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.
Because of the specialized nature of our business, the termination of relationships with our key employees, consultants and advisors may prevent us from successfully operating our business, including developing our products, conducting clinical studies, commercializing our products and obtaining any necessary financing.
We are highly dependent on the members of our executive team, the loss of whose services may adversely impact the achievement of our objectives. While we have entered into employment or consulting agreements with each of our key executives, any of them could leave our employment at any time. We do not have “key person” insurance on any of our employees. The loss of the services of one or more of our current employees might impede the achievement of our business objectives.
The competition for qualified personnel in the medical device fields is intense and we rely heavily on our ability to attract and retain qualified scientific, technical, and managerial personnel. Our future success depends upon our ability to attract, retain and motivate highly skilled employees. In order to commercialize our products successfully, we will be required to expand our workforce, particularly in the areas of research and development and clinical studies, finance, accounting and reporting, sales and marketing and supply chain management. These activities will require the addition of new personnel and the development of additional expertise by existing management personnel. We face intense competition for qualified individuals from numerous pharmaceutical, biopharmaceutical and biotechnology companies, as well as academic and other research institutions. We may not be able to attract and retain these individuals on acceptable terms or at all. Failure to do so could materially harm our business.
Our Certificate of Incorporation and Bylaws, each as amended to date, provide for indemnification of officers and directors at the expense of the Company and limit their liability that may result in a major cost to us and hurt the interests of our stockholders because corporate resources may be expended for the benefit of officers and/or directors.
Our Certificate of Incorporation and Bylaws, each as amended to date, provide for the indemnification of our officers and directors. We have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the Securities Act and is therefore, unenforceable.
Risks Related to Government Regulation and Product Approvals
Changes to United States federal and state regulatory agencies may cause disruptions and delays in approval of the government approval processes and regulation relating to our products.
It is possible that the current administration could institute significant changes to certain regulatory agencies, including the Department of Government Efficiency ("DOGE"), which is tasked with making changes to eliminate regulations, cut expenditures and restructure federal agencies, some of which could impact public companies. For example, the current administration has discussed several changes to the reach and oversight of the Food and Drug Administration, which could affect its relationship with the pharmaceutical industry, transparency in decision making and ultimately the cost and availability of prescription drugs, as well as oversight over clinical trials and pharmaceutical development, all of which could pose risks (or opportunities) for companies in related industries. Similarly, there have been discussions of "reigning in" regulatory agencies such as the Federal Trade Commission, the Federal Communications Commission and the Federal Energy Regulatory Commission, all of which could impact how companies do business and could pose risks related to our business operations and financial outlook.
There is no guarantee that the FDA will grant 510(k) or de novo clearance or a premarket approval application (“PMA”) of our future products and failure to obtain necessary clearances or approvals for our future products would adversely affect our ability to grow our business.
Our lead product candidate will require FDA clearance of a 510(k) or de novo application or may require FDA approval of a PMA. The FDA may not approve or clear these products for the indications that are necessary or desirable for successful commercialization. Indeed, the FDA may refuse our requests for premarket clearance or premarket approval of new products, new intended uses or modifications to existing products. Failure to receive clearance or approval for our products would have an adverse effect on our ability to continue or expand our business.
If we fail to obtain and maintain regulatory approvals and clearances, or are unable to obtain, or experience significant delays in obtaining, FDA clearances or approvals for our device, our future products or product enhancements, our ability to commercially distribute and market these products could suffer.
Our products will be subject to rigorous regulation by the FDA and numerous other federal, state and foreign governmental authorities. The process of obtaining regulatory clearances or approvals to market a medical device can be costly and time consuming, and we may not be able to obtain these clearances or approvals on a timely basis, if at all. In particular, the FDA permits commercial distribution of a new medical device only after the device has received clearance under Section 510(k) of the Federal Food, Drug and Cosmetic Act, or is the subject of an approved premarket approval application, or PMA, unless the device is specifically exempt from those requirements. The FDA will clear marketing of a lower risk medical device through the 510(k) process if the manufacturer demonstrates that the new product is substantially equivalent to other 510(k)-cleared products or through a de novo process if substantial equivalence is not available. High risk devices deemed to pose the greatest risk, such as life-sustaining, life-supporting, or implantable devices, or devices not deemed substantially equivalent to a previously cleared device, require the approval of a PMA. The PMA process is more costly, lengthy and uncertain than the 510(k) or de novo clearance processes. A PMA application must be supported by extensive data, including, but not limited to, technical, preclinical, clinical trial, manufacturing and labeling data, to demonstrate to the FDA’s satisfaction the safety and efficacy of the device for its intended use. We believe our current product candidate will require clearance through the 510(k) or de novo process.
Our product development for our sensing and ablation technologies may not meet the necessary validation requirements to achieve regulatory approvals, or our internal specifications for commercial viability.
We are developing proprietary sensing and ablation technologies that represent novel applications within the medical device space. As such, these technologies are subject to stringent validation and verification processes, both internally and by regulatory bodies such as the FDA. There is no assurance that our products will meet the safety, efficacy, and performance criteria required to obtain regulatory approvals. Additionally, even if our technologies are shown to be safe and effective in preclinical or early-stage clinical studies, they may not meet the technical, usability, cost, or performance benchmarks necessary for commercial viability. Any delays or failures in validation, or changes in FDA requirements or guidance, could significantly impact our development timelines, increase our costs, and delay or prevent our ability to bring our products to market.
Modifications to our future products may require new regulatory clearances or approvals or may require us to recall or cease marketing our products until clearances or approvals are obtained.
Modifications to our future products may require new regulatory approvals or clearances, including 510(k) clearances or premarket approvals, or require us to recall or cease marketing the modified devices until these clearances or approvals are obtained. The FDA requires device manufacturers to initially make and document a determination of whether or not a modification requires a new approval, supplement or clearance. A manufacturer may determine that a modification could not significantly affect safety or efficacy and does not represent a major change in its intended use, so that no new 510(k) clearance is necessary. However, the FDA can review a manufacturer's decision and may disagree. The FDA may also on its own initiative determine that a new clearance or approval is required. Once we have a commercialized product, we may make modifications in the future that we believe do not or will not require additional clearances or approvals. If the FDA disagrees and requires new clearances or approvals for these modifications, we may be required to recall and to stop marketing our products as modified, which could require us to redesign our products and harm our operating results. In these circumstances, we may be subject to significant enforcement actions.
Where we determine that modifications to our products require a new 510(k) clearance or premarket approval application, we may not be able to obtain those additional clearances or approvals for the modifications or additional indications in a timely manner, or at all. Obtaining clearances and approvals can be a time-consuming process, and delays in obtaining required future clearances or approvals would adversely affect our ability to introduce new or enhanced products in a timely manner, which in turn would harm our future growth.
The results of our future clinical trials may not support our product candidate claims or may result in the discovery of adverse side effects.
We have not completed any clinical trials and we cannot be certain that their results will support our product candidate claims or that the FDA will agree with our conclusions regarding them. Success in pre-clinical studies and early clinical trials does not ensure that later clinical trials will be successful, and we cannot be sure that the later trials will replicate the results of prior trials and pre-clinical studies. The clinical trial process may fail to demonstrate that our product candidates are safe and effective for the proposed indicated uses, which could cause us to abandon a product candidate and may delay development of others. Any delay or termination of our clinical trials will delay the filing of our product submissions and, ultimately, our ability to commercialize our product candidates and generate revenues. It is also possible that patients enrolled in clinical trials will experience adverse side effects that are not currently part of the product candidate’s profile.
We are conducting our initial Proof of Concept trial outside the United States using commercially available RF ablation equipment in a new anatomical region to assess clinical response. We plan to present the relevant data from this trial to the FDA to support the clinical requirements for clearance in the United States. However, there is no assurance that the FDA will accept this data.
Human trials are often designed to begin with a Proof of Concept (“PoC”) trial and then progress to a “Pivotal” or approval, trial. We have started a PoC trial outside the United States using commercially available RF ablation devices, and upon completion, we intend to present the data to the FDA in a pre-submission meeting and use key learnings to inform the protocol for our US-based clinical trials. The first trial is not designed to replace the pivotal trial that will be required by the FDA to support clearance in the United States, but rather to potentially impact the size of that trial. There is no guarantee that our devices will perform the same as commercially available RF ablation equipment or that the results from this PoC trial will be replicated with our own devices. Additionally, there is no assurance that the FDA will accept the data from our international trial or that they will not require us to conduct additional Early Feasibility Studies (“EFS”) to supplement a pivotal trial. Any additional trials required by the FDA could be costly, time-consuming, and may necessitate raising additional financing, for which we have no commitments.
Our clinical studies could be delayed or otherwise adversely affected by many factors, including difficulties in enrolling patients.
Clinical testing can be costly and take many years and the outcome is uncertain and susceptible to varying interpretations. Moreover, success in pre-clinical and early clinical studies does not ensure that large-scale studies will be successful or predict final results. Acceptable results in early studies may not be replicable in later studies. A number of companies have suffered significant setbacks in advanced clinical studies, even after promising results in earlier studies. Negative or inconclusive results or adverse events or incidents during a clinical study could cause the clinical study to be redone or terminated. In addition, failure to appropriately construct clinical studies could result in high rates of adverse events or incidents, which could cause a clinical study to be suspended, redone or terminated. Our failure or the failure of third-party participants in our studies to comply with their obligations to follow protocols and/or legal requirements may also result in our inability to use the affected data in our submissions to regulatory authorities.
The timely completion of clinical studies depends, among other things, on our ability to enroll a sufficient number of patients who remain in the study until its conclusion. We may experience difficulties in patient enrollment in our clinical studies for a variety of reasons, including:
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If we have difficulty enrolling and retaining a sufficient number or diversity of patients to conduct our clinical studies as planned, or encounter other difficulties, we may need to delay, terminate or modify ongoing or planned clinical studies, any of which would have an adverse effect on our business.
We may have limitations in generating statistically significant long-term clinical data and gaining extended-duration indications from clinical studies involving terminal patients.
Our clinical studies, particularly those involving terminal patients with pancreatic cancer, may face significant challenges in generating long-term data and developing extended indications. Given the nature of pancreatic cancer, many patients enrolled in our studies may have a limited life expectancy, which could hinder our ability to gather statistically significant long-term clinical data that may be crucial for establishing broader longer-term indications for our products. The inability to collect sufficient data from these patients may limit the scope of our clinical findings and the potential for additional indications beyond the initial use cases. As a result, the progress of our clinical trials, and the expansion of indications could be delayed and our ability to secure regulatory approvals for longer-term uses may be impacted.
Even if our products are cleared or approved by the FDA, if we or our suppliers fail to comply with ongoing FDA requirements, or if we experience unanticipated problems with our products, these products could be subject to restrictions or withdrawal from the market.
Any product for which we obtain clearance or approval, and the manufacturing processes, reporting requirements, post-approval clinical data and promotional activities for such product, will be subject to continued regulatory review, oversight and periodic inspections by the FDA and other domestic and foreign regulatory bodies. In particular, we, and our suppliers, will be required to comply with FDA’s Quality System Regulations, or QSR, which covers the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging, storage and shipping of any product for which we obtain clearance or approval. FDA enforces the QSR and other regulations through periodic inspections. The failure by us or one of our suppliers to comply with applicable statutes and regulations administered by the FDA, or the failure to timely and adequately respond to any adverse inspectional observations or product safety issues, could result in, among other things, any of the following enforcement actions:
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If any of these actions were to occur, it would harm our reputation and cause our product sales and profitability to suffer and may prevent us from generating revenue. Furthermore, our key component suppliers may not be in compliance with all applicable regulatory requirements which could result in our failure to produce our products on a timely basis and in the required quantities, if at all.
Even if regulatory clearance or approval of a product is granted, such clearance or approval may be subject to limitations on the intended uses for which the product may be marketed and reduce our potential to successfully commercialize the product and generate revenue from the product. If the FDA determines that our promotional materials, labeling, training or other marketing or educational activities constitute promotion of an unapproved use, it could request that we cease or modify our training or promotional materials or subject us to regulatory enforcement actions. It is also possible that other federal, state or foreign enforcement authorities might take action if they consider our training or other promotional materials to constitute promotion of an unapproved use, which could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement.
In addition, we may be required to conduct costly post-market testing and surveillance to monitor the safety or effectiveness of our products, and we must comply with medical device reporting requirements, including the reporting of adverse events and malfunctions related to our products. Later discovery of previously unknown problems with our products, including unanticipated adverse events or adverse events of unanticipated severity or frequency, manufacturing problems, or failure to comply with regulatory requirements such as QSR, may result in changes to labeling, restrictions on such products or manufacturing processes, withdrawal of the products from the market, voluntary or mandatory recalls, a requirement to repair, replace or refund the cost of any medical device we manufacture or distribute, fines, suspension of regulatory approvals, product seizures, injunctions or the imposition of civil or criminal penalties which would adversely affect our business, operating results and prospects.
Our products may in the future be subject to product recalls that could harm our reputation, business and financial results.
The FDA and similar foreign governmental authorities have the authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture. In the case of the FDA, the authority to require a recall must be based on an FDA finding that there is a reasonable probability that the device would cause serious injury or death. Manufacturers may, under their own initiative, recall a product if any material deficiency in a device is found. A government-mandated or voluntary recall by us or one of our distributors could occur as a result of component failures, manufacturing errors, design or labeling defects or other deficiencies and issues. Recalls of any of our products would divert managerial and financial resources and have an adverse effect on our financial condition and results of operations. The FDA requires that certain classifications of recalls be reported to FDA within 10 working days after the recall is initiated. Companies are required to maintain certain records of recalls, even if they are not reportable to the FDA. We may initiate voluntary recalls involving our products in the future that we determine do not require notification of the FDA. If the FDA disagrees with our determinations, they could require us to report those actions as recalls. A future recall announcement could harm our reputation with customers and negatively affect our sales. In addition, the FDA could take enforcement action for failing to report the recalls when they were conducted.
If our products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be subject to medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions.
Under the FDA medical device reporting regulations, medical device manufacturers are required to report to the FDA information that a device has or may have caused or contributed to a death or serious injury or has malfunctioned in a way that would likely cause or contribute to death or serious injury if the malfunction of the device or one of our similar devices were to recur. If we fail to report these events to the FDA within the required timeframes, or at all, FDA could take enforcement action against us. Any such adverse event involving our products also could result in future voluntary corrective actions, such as recalls or customer notifications, or agency action, such as inspection or enforcement action. Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business, and may harm our reputation and financial results.
Certain parts used in the manufacturing of our equipment may experience shortages in global supply, which could impact our ability to manufacture our device for customers or maintain research and development timelines.
There are a number of component parts used in the manufacture of our device that are used by many manufacturers in a variety of products. We will compete with other manufacturers for the supply of these components. Additionally, certain parts that are currently in our design may be discontinued by our supplier requiring us to find alternative parts. This issue may require us to change the design of our device or purchase significant inventories of these parts in order to protect against manufacturing delays. We may not be able to procure alternative components or adequate raw material inventories which would result in an inability to produce our device.
U.S. legislative or FDA regulatory reforms may make it more difficult and costly for us to obtain regulatory approval of our product candidates and to manufacture, market and distribute our products after approval is obtained.
From time to time, legislation is drafted and introduced in Congress that could significantly change the statutory provisions governing the regulatory approval, manufacture and marketing of regulated products or the reimbursement thereof. In addition, FDA regulations and guidance are often revised or reinterpreted by the FDA in ways that may significantly affect our business and our products. Any new regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of future products. In addition, FDA regulations and guidance are often revised or reinterpreted by the agency in ways that may significantly affect our business and our products. It is impossible to predict whether legislative changes will be enacted, or FDA regulations, guidance or interpretations changed, and what the impact of such changes, if any, may be.
Failure to secure and maintain adequate coverage and reimbursement from third-party payers could adversely affect acceptance of our products, if approved, and reduce our revenues.
Assuming we receive approval of our products, we expect that the vast majority of our revenues will come from third-party payers, either directly to us in markets where we plan to provide our device candidates to patients, or indirectly via payments made to hospitals or other entities, which may in the future provide our device candidates to patients.
In the U.S., private payers cover the largest segment of the population, with the remainder either uninsured or covered by governmental payers. The majority of the third-party payers outside the U.S. are government agencies, government sponsored entities or other payers operating under significant regulatory requirements from national or regional governments.
Third-party payers may decline to cover and reimburse certain procedures, supplies or services. Additionally, some third-party payers may decline to cover and reimburse our products for a particular patient even if the payer has a favorable coverage policy addressing our products or previously approved reimbursement for our products. Additionally, private and government payers may consider the cost of a treatment in approving coverage or in setting reimbursement for the treatment.
Private and government payers around the world are increasingly challenging the prices charged for medical products and services. Additionally, the containment of healthcare costs has become a priority of governments around the world. Adoption of additional price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our revenues and operating results. If third-party payers do not consider our products or the combination of our products with additional treatments to be cost-justified under a required cost-testing model, they may not cover our products for their populations or, if they do, the level of reimbursement may not be sufficient to allow us to sell our products on a profitable basis.
Reimbursement for the treatment of patients with medical devices around the world is governed by complex mechanisms established on a national or sub-national level in each country. These mechanisms vary widely among countries, can be informal, somewhat unpredictable, and evolve constantly, reflecting the efforts of these countries to reduce public spending on healthcare. As a result, obtaining and maintaining reimbursement for the treatment of patients with medical devices has become more challenging globally. We cannot guarantee that the use of our products will receive reimbursement approvals and cannot guarantee that our existing reimbursement approvals will be maintained in any country.
Because our technology introduces a novel approach to nerve sensing and ablation, including applications for conditions that are not well served by current therapies, third-party payers may require more extensive clinical and economic evidence than is typically needed for coverage of established technologies. In particular, demonstrating long-term safety, effectiveness, and cost-efficiency in real-world use may be necessary to obtain or maintain reimbursement. The absence of established coding, clinical guidelines, or historical reimbursement precedents for our system may further complicate this process. As a result, lack of adequate reimbursement could delay or limit commercial adoption of our products, even if we obtain regulatory clearance or approval.
Our failure to secure or maintain adequate coverage or reimbursement for our products by third-party payers in the U.S., or in the other jurisdictions in which we market our products, could have a material adverse effect on our business, revenues and results of operations.
We may not be successful in securing and maintaining reimbursement codes necessary to facilitate accurate and timely billing for our products or physician services attendant to our products.
Third-party payers, healthcare systems, government agencies or other groups often issue reimbursement codes to facilitate billing for products and physician services used in the delivery of healthcare. Within the U.S., the billing codes most directly related to our products are contained in the Healthcare Common Procedure Coding System (“HCPCS code set”). The HCPCS code set contains Level I codes that describe physician services, also known as Common Procedural Terminology codes (“CPT codes”) and Level II codes that primarily describe products. Centers for Medicare & Medicaid Services (“CMS”) is responsible for issuing the HCPCS Level II codes. The American Medical Association issues HCPCS Level I codes.
No HCPCS codes or CPT codes currently exist to describe physician services related to the delivery of therapy using our products. We may not be able to secure HCPCS codes and CPT codes for physician services related to our products. Our future revenues and results may be affected by the absence of CPT codes, as physicians may be less likely to prescribe the therapy when there is no certainty that adequate reimbursement will be available for the time, effort, skill, practice expense and malpractice costs required to provide the therapy to patients.
Outside the U.S., we have not secured codes to describe our products or to document physician services related to the delivery of therapy using our products. The failure to obtain and maintain these codes could affect the future growth of our business.
If we are unable to establish good relationships with physicians, our business could be negatively affected.
Our business model will require us to build and maintain good relationships with physicians who will have a significant source of patients that will generate treatment revenues for both the physician and the Company. If we are unable to establish good relationships with physicians and maintain them, it will jeopardize our ability to generate future revenues.
There is no assurance that Medicare or the Medicare Administrative Contractors will provide coverage or adequate payment rates for our products.
We anticipate that a significant portion of patients using our products will be beneficiaries under the Medicare fee-for-service program. Failure to secure or maintain coverage or maintain adequate reimbursement from Medicare would reduce our revenues and may also affect the coverage and reimbursement decisions of other third-party payers in the U.S. and elsewhere.
Medicare may classify our medical device as durable medical equipment (“DME”). Medicare has the authority to issue national coverage determinations or to defer coverage decisions to its regional Medicare Administrative Contractors (“MACs”). The fact that only two MACs administer the entire DME program may negatively affect our ability to petition individual medical policy decision-makers at the MACs for coverage. The absence of a positive coverage determination or a future restriction to existing coverage from Medicare or the DME MACs would materially affect our future revenues.
Additionally, Medicare has the authority to publish the reimbursement amounts for DME products. Medicare may in the future publish reimbursement amounts for our products that do not reflect then-current prices for our products. Medicare fee schedules are frequently referenced by private payers in the U.S. and around the world. Medicare’s publication of reimbursement amounts for our products that are below our products’ established prices could materially reduce our revenues and operating results with respect to non-Medicare payers in the U.S. and our other active markets.
Even if our products were authorized by Medicare, CMS requires prior authorization for certain DME items. Claims for such items that did not receive prior authorization before they were furnished to a beneficiary will be automatically denied. In the event Medicare adds one of our products to the list of items requiring prior authorization, our ability to bill and secure reimbursement for patients who would otherwise be covered to use our product under the Medicare fee-for-service program may be reduced.
We cannot provide any assurance that we can access transitional, expedited, or expanded Medicare coverage for our products. CMS is expected to issue rules regarding coverage of emerging technologies; however, no specific information is available about the content of the expected rules and we cannot provide any assurance that any new rules regarding emerging technologies would be applicable to our future products.
Risks Related to Intellectual Property
If third parties claim that our products infringe their intellectual property rights, we may be forced to expend significant financial resources and management time defending against such actions and our financial condition and our results of operations could suffer.
Third parties may claim that our products infringe their patents and other intellectual property rights. Identifying third-party patent rights can be particularly difficult because, in general, patent applications can be maintained in secrecy for a prolonged period after their earliest priority date. Historically, there has been substantial litigation regarding patents and other intellectual property rights in the medical device and related industries. If a competitor were to challenge our patents or other intellectual property rights, or assert that our products infringe its patent or other intellectual property rights, we could incur substantial litigation costs, be forced to make expensive changes to our product design, pay royalties or other fees to license rights in order to continue manufacturing and selling our products, or pay substantial damages. Third-party infringement claims, regardless of their outcome, would not only consume our financial resources but also divert our management’s time and effort.
If we are unable to protect the intellectual property used in our products, others may be able to copy our innovations which may impair our ability to compete effectively in our markets.
The strength of our patents involves complex legal and scientific questions and can be uncertain. These patent applications may be challenged or fail to result in issued patents, or if issued, these patents and our existing patents may be too narrow to prevent third-parties from developing or designing around our intellectual property and in that event, we may lose competitive advantage, which could result in harm to our business.
We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
As is common in the medical device industry, we may employ individuals who were previously employed at other medical device companies, including our competitors or potential competitors. We may be subject to claims that these employees, or we, have used or disclosed trade secrets or other proprietary information of their former employers. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.
If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be adversely affected.
In addition to patented technology, we rely upon, among other things, unpatented proprietary technology, processes, trade secrets and know-how. Any involuntary disclosure to or misappropriation by third-parties of our confidential or proprietary information could enable competitors to duplicate or surpass our technological achievements, potentially eroding our competitive position in our market. We seek to protect confidential or proprietary information in part by confidentiality agreements with our employees, consultants and third-parties. While we require all of our employees, consultants, advisors and any third-parties who have access to our proprietary know-how, information and technology to enter into confidentiality agreements, we cannot be certain that this know-how, information and technology will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. These agreements may be terminated or breached, and we may not have adequate remedies for any such termination or breach. Furthermore, these agreements may not provide meaningful protection for our trade secrets and know-how in the event of unauthorized use or disclosure. To the extent that any of our staff were previously employed by other pharmaceutical, medical technology or biotechnology companies, those employers may allege violations of trade secrets and other similar claims in relation to their medical device development activities for us.
We may not be able to protect our intellectual property rights throughout the world.
We are dependent on patents. Filing, prosecuting and defending patents in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States may be less extensive than those in 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. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States 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 have not 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 infringing products may compete with the product candidates we may develop, without any available recourse.
The laws of some other countries do not protect intellectual property rights to the same extent as the laws of the United States. Patent protection must ultimately be sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes. Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries. In addition, the legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property protection. As a result, many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. Because the legal systems of many foreign countries do not favor the enforcement of patents and other intellectual property protection, it could be difficult for us to stop the infringement, misappropriation or violation of our patents or our licensors’ patents or marketing of competing products in violation of our proprietary rights. Proceedings to enforce our intellectual property and other proprietary rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents or the patents of our licensors at risk of being invalidated or interpreted narrowly, could put our patent applications or the patent applications of our licensors 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.
Risks Related to Information Technology
Our business and operations would suffer in the event of third-party computer system failures, cyberattacks on third-party systems or deficiency in our cybersecurity.
We rely on information technology (“IT”) systems, including third-party “cloud based” service providers, to keep financial records, maintain laboratory data, clinical data, and corporate records, to communicate with staff and external parties and to operate other critical functions. This includes critical systems such as email, other communication tools, electronic document repositories and archives. If any of these third-party information technology providers are compromised due to computer viruses, unauthorized access, malware, natural disasters, fire, terrorism, war and telecommunication failures, electrical failures, cyberattacks or cyber-intrusions over the internet, then sensitive emails or documents could be exposed or deleted. Similarly, we could incur business disruption if our access to the internet is compromised, and we are unable to connect with third-party IT providers. The risk of a security breach or disruption, particularly through cyberattacks or cyber-intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. In addition, we rely on those third parties to safeguard important confidential personal data regarding our employees and subjects enrolled in our clinical trials. If a disruption event were to occur and cause interruptions in a third-party IT provider’s operation, it could result in a disruption of our drug development programs. For example, the loss of clinical trial data from completed, ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach results in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and development of our product candidates could be delayed or could fail.
Artificial intelligence presents risks and challenges that can impact our business, including by posing security risks to our confidential information, proprietary information and personal data.
Issues in the development and use of artificial intelligence, combined with an uncertain regulatory environment, may result in reputational harm, liability, or other adverse consequences to our business operations. As with many technological innovations, artificial intelligence presents risks and challenges that could impact our business. We may adopt and integrate generative artificial intelligence tools into our systems for specific use cases reviewed by legal and information security. Our vendors may incorporate generative artificial intelligence tools into their offerings without disclosing this use to us, and the providers of these generative artificial intelligence tools may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection and may inhibit our or our vendors’ ability to maintain an adequate level of service and experience. If we, our vendors, or our third-party partners experience an actual or perceived breach or privacy or security incident because of the use of generative artificial intelligence, we may lose valuable intellectual property and confidential information and our reputation and the public perception of the effectiveness of our security measures could be harmed. Further, bad actors around the world use increasingly sophisticated methods, including the use of artificial intelligence, to engage in illegal activities involving the theft and misuse of personal information, confidential information, and intellectual property. Any of these outcomes could damage our reputation, result in the loss of valuable property and information, and adversely impact our business.
Cybersecurity risks and cyber incidents could adversely affect our business and disrupt operations.
Cyber incidents can result from deliberate attacks or unintentional events. These incidents can include, but are not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption. The result of these incidents could include, but are not limited to, disrupted operations, misstated financial data, liability for stolen assets or information, increased cybersecurity protection costs, litigation and reputational damage adversely affecting customer or investor confidence. We are in the process of implementing systems and processes to focus on identification, prevention, mitigation and resolution. However, these measures cannot provide absolute security, and our systems may be vulnerable to cybersecurity breaches such as viruses, hacking, and similar disruptions from unauthorized intrusions. In addition, we rely on third party service providers to perform certain services, such as payroll and tax services. Any failure of our systems or third-party systems may compromise our sensitive information and/or personally identifiable information of our employees or patient health information subject to HIPAA confidentiality requirements. While we are in the process of securing cyber insurance to potentially cover certain risks associated with cyber incidents, there can be no assurance the insurance will be sufficient to cover any such liability.
Risks Related to our Common Stock
Concentration of ownership of our common stock among our existing executive officers and directors may prevent new investors from influencing significant corporate decisions.
Our executive officers and directors, and their affiliates, who are our principal stockholders, in the aggregate, beneficially own approximately 10.2% of our outstanding common stock as of the date hereof. 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, sale of all or substantially all of our assets, or other significant corporate transactions. The minority stockholders have no way of overriding decisions made by our principal stockholders. This level of control may also have an adverse impact on the market value of our shares because our principal stockholders may institute or undertake transactions, policies or programs that result in losses and may not take any steps to increase our visibility in the financial community and/or may sell sufficient numbers of shares to significantly decrease our price per share.
We do not intend to pay cash dividends on our common stock in the foreseeable future.
We have never declared or paid cash dividends on our capital stock. Subject to any series of preferred stock we may issue in the future, we intend to retain all available funds and any future earnings for use in the operation and expansion of our business and do not anticipate paying any cash dividends on our common stock in the foreseeable future. Accordingly, shareholders may have to sell some or all of their shares of our common stock in order to generate cash flow from an investment in our common stock.
If our stock price fluctuates, you could lose a significant part of your investment.
The market price of our common stock may be subject to wide fluctuations in response to, among other things, the risk factors described in this prospectus and other factors beyond our control, such as fluctuations in the valuation of companies perceived by investors to be comparable to us. Furthermore, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political, and market conditions, such as recessions, interest rate changes or international currency fluctuations, may negatively affect the market price of our common stock. In the past, many companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.
Techniques employed by short sellers may in the future drive down the market price of our common stock.
Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third-party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller’s best interests for the price of the stock to decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a stock short. These short attacks have led to selling of shares in the market. Issuers that have common stock with limited trading volumes and/or have been susceptible to relatively high volatility levels, can be particularly vulnerable to such short seller attacks. The publication of any such articles regarding us in the future may bring about a temporary, or possibly long-term, decline in the market price of our common stock. If we continue to be the subject of unfavorable allegations, we may have to expend a significant amount of resources to investigate such allegations and/or defend ourselves. While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short seller by applicable state law or issues of commercial confidentiality. Such a situation could be costly, and time-consuming, and could be distracting for our management team.
If 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.
The trading market for our common stock is influenced by the research and reports that industry or securities analysts publish about us, our industry and our market. If no analyst elects to cover us and publish research or reports about us, the market for our common stock could be severely limited and our stock price could be adversely affected. As a small-cap company who has recently completed its IPO pursuant to Regulation A, we are more likely than our larger competitors to lack coverage from securities analysts. In addition, even if we receive analyst coverage, if one or more analysts ceases coverage of us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. If one or more analysts who elect to cover us issue negative reports or adversely change their recommendations regarding our common stock, our stock price could decline.
The market price of our stock may be highly volatile, and you could lose all or part of your investment.
The market for our common stock may be characterized by significant price volatility when compared to the shares of larger, more established companies that have large public floats, and we expect that our stock price will be more volatile than the shares of such larger, more established companies for the indefinite future. The stock market in general, and the market for stocks of technology companies in particular, has recently been highly volatile. Furthermore, there have been recent instances of extreme stock price run-ups followed by rapid price declines and stock price volatility following a number of recent initial public offerings, particularly among companies with relatively smaller public floats. We may also experience such volatility, including stock run-ups, which may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our common stock.
Your ownership may be diluted if additional capital stock is issued to raise capital, to finance acquisitions or in connection with strategic transactions.
We intend to seek to raise additional funds, finance acquisitions or develop strategic relationships by issuing equity or convertible debt securities, which would reduce the percentage ownership of our existing stockholders. Our board of directors has the authority, without action or vote of the stockholders, to issue all or any part of our authorized but unissued shares of common or preferred stock. Our certificate of incorporation authorizes us to issue up to 500,000,000 shares of common stock and 10,000,000 shares of preferred stock. Future issuances of common or preferred stock would reduce your influence over matters on which stockholders vote and would be dilutive to earnings per share. In addition, any newly issued preferred stock could have rights, preferences and privileges senior to those of the common stock. Those rights, preferences and privileges could include, among other things, the establishment of dividends that must be paid prior to declaring or paying dividends or other distributions to holders of our common stock or providing for preferential liquidation rights. These rights, preferences and privileges could negatively affect the rights of holders of our common stock, and the right to convert such preferred stock into shares of our common stock at a rate or price that would have a dilutive effect on the outstanding shares of our common stock.
We may be required to issue up to 271,846 shares of common stock in connection with the reverse stock split we completed on October 24, 2024, and we may be subject to potential liability if it is determined that we are required to issue such shares and we fail to issue such shares on a timely basis.
On October 24, 2024, we completed a one-for-twenty reverse stock split of our common stock. In connection with the approval of the reverse stock split, we agreed that no fractional shares will be issued in connection with the reverse stock split and that we would issue one full share of the post-reverse stock split common stock to any shareholder who would have been entitled to receive a fractional share as a result of the process. On November 1, 2024, we received notice from DTCC on behalf of the brokerage firms that hold the shares of our common stock held in “street name” that in connection with the foregoing rounding of shares we would need to issue 271,846 shares of common stock.
We do not believe the number of shares being requested is correct based on the historical number of shareholders of our common stock and have begun an inquiry into the calculations set forth in the request. During the pendency of this inquiry, we do not expect to issue any shares in connection with the fractional shares being requested. We may face potential liability for our failure to issue the shares of common stock if it is determined that we are required to issue such shares. In addition, our shareholders will be diluted to the extent of any issuances of shares of common stock in connection with the foregoing.
If we are unable to maintain compliance with the listing requirements of The Nasdaq Capital Market, our common stock may be delisted from The Nasdaq Capital Market which could have a material adverse effect on our financial condition and could make it more difficult for you to sell your shares.
Our common stock is listed on The Nasdaq Capital Market, and we are therefore subject to its continued listing requirements, including requirements with respect to the market value of publicly held shares, market value of listed shares, minimum bid price per share, and minimum stockholder's equity, among others, and requirements relating to board and committee independence. If we fail to satisfy one or more of the requirements, we may be delisted from The Nasdaq Capital Market.
We have in the past, and we may again in the future, fail to comply with the continued listing requirements of the Nasdaq Capital Market, which would subject our common stock to being delisted. Delisting from The Nasdaq Capital Market would adversely affect our ability to raise additional financing through the public or private sale of equity securities, may significantly affect the ability of investors to trade our securities and may negatively affect the value and liquidity of our common stock. Delisting also could have other negative results, including the potential loss of employee confidence, the loss of institutional investors or interest in business development opportunities.
Provisions of the Series A Warrants we issued in our offering could discourage an acquisition of us by a third party.
The Series A Warrants we issued in our November 2024 offering provide that in the event of a “Fundamental Transaction” (as defined in the related warrant agreement, which generally includes any merger with another entity, the sale, transfer or other disposition of all or substantially all of our assets to another entity, or the acquisition by a person of more than 50% of our common stock), each Series A Warrant holder will have the right at any time prior to the consummation of the Fundamental Transaction to require us to repurchase the common warrant for a purchase price in cash equal to the Black-Scholes value (as calculated under the warrant agreement) of the then remaining unexercised portion of such Series A Warrant on the date of such Fundamental Transaction, which may materially adversely affect our financial condition and/or results of operations and may prevent or deter a third party from acquiring us.
General Risks
Shareholder activism could cause material disruption to our business.
Publicly traded companies have increasingly become subject to campaigns by activist investors advocating corporate actions such as actions related to environment, social and governance (ESG) matters, among other issues. Responding to proxy contests and other actions by such activist investors or others in the future could be costly and time-consuming, disrupt our operations and divert the attention of our Board of Directors and senior management from the pursuit of our business strategies, which could adversely affect our results of operations and financial condition.
As 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.
As an “emerging growth company” under the JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. We are an emerging growth company until the earliest of:
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For so long as we remain an emerging growth company, we will not be required to:
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We intend to take advantage of all of these reduced reporting requirements and exemptions.
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We cannot predict if investors will find our securities less attractive due to our reliance on these exemptions. If investors were to find our common stock less attractive as a result of our election, we may have difficulty raising all of the proceeds in any future offering.
Our Certificate of Incorporation includes a forum selection provision, which could result in less favorable outcomes to the plaintiff(s) in any action against us.
Our Certificate of Incorporation includes a forum selection provision that requires any claims against us by stockholders not arising under the federal securities laws to be brought in the Court of Chancery State in the state of Delaware. This forum selection provision may limit investors’ ability to bring claims in judicial forums that they find favorable to such disputes and may discourage lawsuits with respect to such claims. In addition, this forum selection provision may impose additional litigation costs on stockholders in pursuing the claims identified above, particularly if the stockholders do not reside in or near the State of Delaware.
The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.
As a public company, we incur accounting, legal and other expenses that we did not incur as a private company. We incur costs associated with our public company reporting requirements. We also incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002, as well as rules and regulations implemented by the United States Security and Exchange Commission (“SEC”) and Nasdaq. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. Furthermore, these rules and regulations could make it more difficult or costlier for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers. We are currently evaluating and monitoring developments with respect to these rules and regulations and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.
We may be at an increased risk of securities class action litigation.
Historically, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us because biotechnology companies have experienced significant stock price volatility in recent years. If we were to be sued, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.
Risks Related to this Offering
Our management will have broad discretion over the use of proceeds from this offering and may not use the proceeds effectively.
Our management will have considerable discretion in the application of the net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. The net proceeds may be used for corporate purposes that do not improve our operating results or enhance the value of our securities. Our expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering. The amounts and timing of our actual use of the net proceeds will vary depending on numerous factors, including amount of cash used in our operations, which can be highly uncertain, subject to substantial risks and can often change. Our management will have broad discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the net proceeds of this offering. The failure by our management to apply these funds effectively could harm our business. If we do not invest or apply the net proceeds from this offering in ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause our stock price to decline.