XTLbio(US:XTLB)2022-03-30 21:13Financial Position - As of December 31, 2021, the company had approximately $2,969 thousand in cash and cash equivalents, working capital of approximately $6,006 thousand, and an accumulated deficit of approximately $155,133 thousand[36]. - The company estimates that its outstanding cash and cash equivalent balances will allow it to finance its activities for at least 12 months from the date of the report[36]. - The net cash used in operating activities for the year ended December 31, 2021, was $1,049 thousand, indicating a need for significant additional financing[99]. - The company is required to maintain stockholders' equity of at least $2.5 million and a market value of listed securities of $35 million to comply with Nasdaq listing standards[116]. - Future issuances of a substantial number of ADSs could depress the market price of the ordinary shares or ADSs, making it more difficult to raise funds through equity sales[103]. - The company has never declared or paid any cash dividends on its ordinary stock and does not anticipate paying any cash dividends in the foreseeable future[112]. Operating Losses and Financing Needs - The company expects to continue incurring operating losses for the foreseeable future due to ongoing drug development activities[33]. - The company will require substantial additional financing to achieve its goals, and failure to obtain necessary capital could delay or terminate product development efforts[35]. - The company may need to raise additional financing by issuing securities to continue its clinical trials aimed at obtaining marketing approval for its products[36]. - The company may seek additional capital due to favorable market conditions or strategic considerations even if it believes it has sufficient funds for current operations[37]. - The company may seek additional capital through various means, which could dilute existing shareholders' interests[39]. Clinical Trials and Product Development - The company has not yet commercialized any products or technologies and may never achieve profitability[29]. - The company is currently developing the hCDR1 product candidate, which is planned for advanced clinical studies[59]. - The company faces risks related to the success of its clinical trials, which are uncertain and could adversely affect its business strategy[30]. - The company faces risks related to the completion of clinical trials, including potential delays in patient enrollment and site engagement[43]. - The company has limited experience in conducting clinical trials necessary for obtaining regulatory approvals[44]. - The company must demonstrate safety and efficacy in humans to obtain FDA approval, which requires significant additional research and testing[44]. - The company anticipates significant operating and capital expenditures for the foreseeable future related to research and development, clinical trials, and regulatory approvals[37]. - The company is at risk of incurring additional costs and delays if clinical trials do not yield positive results or if regulatory approvals are not obtained[51]. Third-Party Reliance and Risks - The company relies on third parties for clinical trials and manufacturing, and any failure in these areas could harm its business[31]. - The company relies on third-party manufacturers for the production of drug candidates, which poses risks if these manufacturers fail to deliver on time or meet quality standards[65]. - The company is subject to risks related to third-party manufacturers' compliance with regulations, which could impact product commercialization[69]. - The company relies on licensed drug candidates and technologies, and failure to meet obligations could result in loss of rights[89]. Market and Competitive Environment - The company faces competition from pharmaceutical and biotechnology companies with greater capital resources and experience in drug development[71]. - The company anticipates that market acceptance of its products will depend on factors such as safety, efficacy, and cost-effectiveness compared to existing treatments[63]. - The company may face challenges in establishing strategic partnerships and licensing arrangements, which are crucial for commercialization[61]. Legal and Regulatory Risks - The company may incur substantial costs and management distraction if securities class-action litigation is instituted against it following periods of market volatility[102]. - Political, economic, and military conditions in Israel may adversely affect the company's operations and results, particularly due to the ongoing hostilities and threats in the region[120]. - The company may encounter difficulties in enforcing U.S. judgments or securities law claims in Israel, complicating legal recourse[127]. - Tax considerations under Israeli law may make certain transactions less appealing, impacting shareholder interests and potential mergers[125]. - Israeli law may delay or impede potential mergers or acquisitions, requiring specific approvals and timeframes that could hinder strategic transactions[124]. Currency and Economic Risks - The company holds most of its cash and equivalents in U.S. dollars, while a significant portion of its expenses is in New Israeli Shekels (NIS), exposing it to currency fluctuation risks[123]. - Inflation and currency devaluation risks in Israel could adversely affect the company's financial results, especially if inflation exceeds the rate of currency devaluation[123]. - The ongoing military conflict between Russia and Ukraine has led to significant volatility in global markets, which may adversely affect the company's financial condition[84]. - The company is subject to economic boycotts and restrictive laws from several countries, which may adversely impact its operating results and business expansion[122]. Shareholder and Market Considerations - The concentration of ownership among two principal shareholders, Mr. Alexander Rabinovitch and Mr. David Bassa, who hold approximately 25.79% of the ordinary shares, may significantly influence corporate decisions[104]. - The trading volume of the company's ADSs has historically been low, limiting the ability to sell at desirable prices[100]. - The trading price of the ADSs is likely to be highly volatile, influenced by various factors including drug candidate developments and market conditions[101]. - If the company fails to maintain compliance with Nasdaq's continued listing standards, it may face delisting, which could impair capital-raising efforts and reduce liquidity[117]. - Delisting of the ADSs could result in them being classified as "penny stocks," leading to reduced trading activity and attractiveness to investors[118]. - The effective trading prices of the company's securities may differ on Nasdaq and TASE due to different currencies and trading times[105].