Company Classification and Reporting - The company is classified as an "emerging growth company" and a "smaller reporting company," which allows it to provide only two years of audited financial statements and reduced disclosure obligations [475]. - The company may continue to be a smaller reporting company as long as its common stock held by non-affiliates is less than 100 million [477]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures [594]. Regulatory and Compliance Risks - The company has not yet obtained regulatory approvals for any of its product candidates, making future operating results difficult to predict [478]. - The company may incur increased costs and demands upon management due to compliance with public company laws and regulations, affecting its financial condition [492]. - The company failed to timely file its Form 8-K with Form 10 information, resulting in a lapse in compliance with SEC reporting requirements since February 14, 2024 [501]. - The company is subject to increased legal and financial compliance costs due to evolving laws and regulations, which may divert management's attention from business operations [494]. - The company faces risks of litigation due to increased visibility from public disclosures, which could harm its business and financial condition [496]. Financial Performance and Fluctuations - Revenue may depend on development funding and achievement of clinical milestones under license and collaboration agreements, which can vary significantly from period to period [479]. - Operating results may fluctuate significantly due to various factors, including clinical trial outcomes and regulatory approvals [481]. - The cumulative effect of various unpredictable factors could result in large fluctuations in quarterly and annual operating results, making past results unreliable for future performance predictions [482]. - Future acquisitions or strategic partnerships may increase capital requirements and dilute stockholders, posing various risks [487]. Stock and Market Compliance - The closing bid price for the company's Common Stock has been below the minimum 50,000,000 within the compliance period [506]. - The company has been granted an extension until April 22, 2025, to regain compliance with Nasdaq listing requirements, including demonstrating compliance with the Bid Price Requirement [508]. - As of April 11, 2025, there are various warrants outstanding that could result in significant dilution to existing shareholders if exercised [514]. - The company has not satisfied the $2.5 million stockholder's equity requirement as of the date of the Annual Report [510]. Internal Control and Financial Reporting - The company has identified a material weakness in its internal control over financial reporting, which could impair the accuracy and timeliness of its financial statements [497]. - Earnout Shares are classified as liabilities and their fair value is remeasured quarterly, potentially causing volatility in financial results [515]. - Changes in the estimated fair value of Earnout Shares are recorded in Other income (expense) on the consolidated statement of operations [515]. - Non-cash gains or losses on Earnout Shares are expected to be recognized each reporting period, which could materially impact financial results [515]. Insurance and Liability - The company may experience reduced coverage or increased costs for director and officer liability insurance due to being a public company [495].
CERo Therapeutics(CERO) - 2024 Q4 - Annual Report